Economic Forecast: Rough Road Ahead for Dermatologists

WAIKOLOA, HAWAII – Dr. Brett M. Coldiron is a sort of latter-day Paul Revere, travelling far and wide to spread the alarm to his fellow dermatologists – not of Redcoats a’coming, but of the need to prepare for looming economic hard times.

"I wasn’t invited to speak at your meeting, so I invited myself," he declared by way of introduction at the Hawaii Dermatology Seminar sponsored by Skin Disease Education Foundation (SDEF), as he launched into an analysis of dermatology’s near-term financial future.

"I’m here to present your 5-year economic plan – what you can expect. I think you can plan your next 5 years based on these predictions. It’s not pretty; and it’s not kind," cautioned Dr. Coldiron, whose expertise regarding health care policy and reform has been forged through long-term involvement representing dermatology on the American Medical Association’s Relative Value Scale Update, Health Care Finance, and Government Health Care Policy committees.

His core message to his colleagues boiled down to this: "Don’t build palaces. It’s time to hunker down."

Dermatology is a heavily procedurally oriented, small specialty – less then 1% of all physicians – which has experienced dramatic growth in procedure volume over the past couple decades. As such, it is a high-priority target for congressional cost-cutting efforts. In the first 4 months of next year, Dr. Coldiron said he expects reimbursement for codes pertaining to actinic keratosis treatment to be cut by 25%-50%, along with a roughly 20% reduction in payment for Mohs surgery. And that’s just the beginning.

Dermatology and other small specialties will bear the brunt of any cost-savings attempts by Congress. Dermatology has powerful enemies in Congress, the Centers for Medicare and Medicaid Services, and the American Medical Association, who view dermatologists as overpaid, wasteful abusers of the system, explained Dr. Coldiron, who is president of the American College of Mohs Surgery and a 2013 member of the American Academy of Dermatology’s board of directors.

Among his predictions for the next 5 years:

• Hospitals and pharmacies, if squeezed too hard, will simply close. Insurers will move into other lines of business coverage. Pharmaceutical companies will reduce their research and development budgets. Thus, reducing physician income will be one of the few politically acceptable health care cost-cutting avenues available.

• There will be more bundling of minor procedures into evaluation and management fees.

• The government will attempt to force all physicians to accept Medicaid. "They’ll probably try to tie it to your acceptance of Medicare. Or maybe they’ll say, ‘We paid for 4 years of postgraduate education; now you owe us 4 years of taking Medicaid,’ " he said.

• The use of physician assistants and nurse practitioners will grow in dermatology. This will result in increased utilization and more intense billing audits along with reimbursement cuts aimed at cancelling out the economic impact of greater utilization.

• Cosmetic procedures and reconstructive surgery will remain safe havens. "They may try to pass a cosmetic procedure tax, but I think the fact that you have another source of income is very important," noted Dr. Coldiron, a dermatologist at the University of Cincinnati.

He recommended that dermatologists temper their income projections for the coming half-decade: "Don’t promise big salaries to new associates, only a percentage of income collected."

Also, read the fine print before jumping on board one of the accountable care organizations that are springing up. "This is government-driven managed care with capitation. What they’re going to do is extract from the specialists and give back to primary care. It’s kind of a loser’s game," he said.

Beyond the next 5 years, however, the outlook for dermatology is bright, Dr. Coldiron stressed.

"Be strong. We are not greedy specialists; we are a frontline specialty fighting an epidemic of skin cancer. We are needed by our patients and by the health care system. The pendulum will eventually swing back our way," he concluded.

Dr. Coldiron reported having no relevant financial conflicts. SDEF and this news organization are owned by Elsevier.

WAIKOLOA, HAWAII – Dr. Brett M. Coldiron is a sort of latter-day Paul Revere, travelling far and wide to spread the alarm to his fellow dermatologists – not of Redcoats a’coming, but of the need to prepare for looming economic hard times.

"I wasn’t invited to speak at your meeting, so I invited myself," he declared by way of introduction at the Hawaii Dermatology Seminar sponsored by Skin Disease Education Foundation (SDEF), as he launched into an analysis of dermatology’s near-term financial future.

"I’m here to present your 5-year economic plan – what you can expect. I think you can plan your next 5 years based on these predictions. It’s not pretty; and it’s not kind," cautioned Dr. Coldiron, whose expertise regarding health care policy and reform has been forged through long-term involvement representing dermatology on the American Medical Association’s Relative Value Scale Update, Health Care Finance, and Government Health Care Policy committees.

His core message to his colleagues boiled down to this: "Don’t build palaces. It’s time to hunker down."

Dermatology is a heavily procedurally oriented, small specialty – less then 1% of all physicians – which has experienced dramatic growth in procedure volume over the past couple decades. As such, it is a high-priority target for congressional cost-cutting efforts. In the first 4 months of next year, Dr. Coldiron said he expects reimbursement for codes pertaining to actinic keratosis treatment to be cut by 25%-50%, along with a roughly 20% reduction in payment for Mohs surgery. And that’s just the beginning.

Dermatology and other small specialties will bear the brunt of any cost-savings attempts by Congress. Dermatology has powerful enemies in Congress, the Centers for Medicare and Medicaid Services, and the American Medical Association, who view dermatologists as overpaid, wasteful abusers of the system, explained Dr. Coldiron, who is president of the American College of Mohs Surgery and a 2013 member of the American Academy of Dermatology’s board of directors.

Among his predictions for the next 5 years:

• Hospitals and pharmacies, if squeezed too hard, will simply close. Insurers will move into other lines of business coverage. Pharmaceutical companies will reduce their research and development budgets. Thus, reducing physician income will be one of the few politically acceptable health care cost-cutting avenues available.

• There will be more bundling of minor procedures into evaluation and management fees.

• The government will attempt to force all physicians to accept Medicaid. "They’ll probably try to tie it to your acceptance of Medicare. Or maybe they’ll say, ‘We paid for 4 years of postgraduate education; now you owe us 4 years of taking Medicaid,’ " he said.

• The use of physician assistants and nurse practitioners will grow in dermatology. This will result in increased utilization and more intense billing audits along with reimbursement cuts aimed at cancelling out the economic impact of greater utilization.

• Cosmetic procedures and reconstructive surgery will remain safe havens. "They may try to pass a cosmetic procedure tax, but I think the fact that you have another source of income is very important," noted Dr. Coldiron, a dermatologist at the University of Cincinnati.

He recommended that dermatologists temper their income projections for the coming half-decade: "Don’t promise big salaries to new associates, only a percentage of income collected."

Also, read the fine print before jumping on board one of the accountable care organizations that are springing up. "This is government-driven managed care with capitation. What they’re going to do is extract from the specialists and give back to primary care. It’s kind of a loser’s game," he said.

Beyond the next 5 years, however, the outlook for dermatology is bright, Dr. Coldiron stressed.

"Be strong. We are not greedy specialists; we are a frontline specialty fighting an epidemic of skin cancer. We are needed by our patients and by the health care system. The pendulum will eventually swing back our way," he concluded.

Dr. Coldiron reported having no relevant financial conflicts. SDEF and this news organization are owned by Elsevier.

WAIKOLOA, HAWAII – Dr. Brett M. Coldiron is a sort of latter-day Paul Revere, travelling far and wide to spread the alarm to his fellow dermatologists – not of Redcoats a’coming, but of the need to prepare for looming economic hard times.

"I wasn’t invited to speak at your meeting, so I invited myself," he declared by way of introduction at the Hawaii Dermatology Seminar sponsored by Skin Disease Education Foundation (SDEF), as he launched into an analysis of dermatology’s near-term financial future.

"I’m here to present your 5-year economic plan – what you can expect. I think you can plan your next 5 years based on these predictions. It’s not pretty; and it’s not kind," cautioned Dr. Coldiron, whose expertise regarding health care policy and reform has been forged through long-term involvement representing dermatology on the American Medical Association’s Relative Value Scale Update, Health Care Finance, and Government Health Care Policy committees.

His core message to his colleagues boiled down to this: "Don’t build palaces. It’s time to hunker down."

Dermatology is a heavily procedurally oriented, small specialty – less then 1% of all physicians – which has experienced dramatic growth in procedure volume over the past couple decades. As such, it is a high-priority target for congressional cost-cutting efforts. In the first 4 months of next year, Dr. Coldiron said he expects reimbursement for codes pertaining to actinic keratosis treatment to be cut by 25%-50%, along with a roughly 20% reduction in payment for Mohs surgery. And that’s just the beginning.

Dermatology and other small specialties will bear the brunt of any cost-savings attempts by Congress. Dermatology has powerful enemies in Congress, the Centers for Medicare and Medicaid Services, and the American Medical Association, who view dermatologists as overpaid, wasteful abusers of the system, explained Dr. Coldiron, who is president of the American College of Mohs Surgery and a 2013 member of the American Academy of Dermatology’s board of directors.

Among his predictions for the next 5 years:

• Hospitals and pharmacies, if squeezed too hard, will simply close. Insurers will move into other lines of business coverage. Pharmaceutical companies will reduce their research and development budgets. Thus, reducing physician income will be one of the few politically acceptable health care cost-cutting avenues available.

• There will be more bundling of minor procedures into evaluation and management fees.

• The government will attempt to force all physicians to accept Medicaid. "They’ll probably try to tie it to your acceptance of Medicare. Or maybe they’ll say, ‘We paid for 4 years of postgraduate education; now you owe us 4 years of taking Medicaid,’ " he said.

• The use of physician assistants and nurse practitioners will grow in dermatology. This will result in increased utilization and more intense billing audits along with reimbursement cuts aimed at cancelling out the economic impact of greater utilization.

• Cosmetic procedures and reconstructive surgery will remain safe havens. "They may try to pass a cosmetic procedure tax, but I think the fact that you have another source of income is very important," noted Dr. Coldiron, a dermatologist at the University of Cincinnati.

He recommended that dermatologists temper their income projections for the coming half-decade: "Don’t promise big salaries to new associates, only a percentage of income collected."

Also, read the fine print before jumping on board one of the accountable care organizations that are springing up. "This is government-driven managed care with capitation. What they’re going to do is extract from the specialists and give back to primary care. It’s kind of a loser’s game," he said.

Beyond the next 5 years, however, the outlook for dermatology is bright, Dr. Coldiron stressed.

"Be strong. We are not greedy specialists; we are a frontline specialty fighting an epidemic of skin cancer. We are needed by our patients and by the health care system. The pendulum will eventually swing back our way," he concluded.

Dr. Coldiron reported having no relevant financial conflicts. SDEF and this news organization are owned by Elsevier.