March 2016 | Physician Magazine

PLUS: KEYS TO BEING FINANCIALLY PREPARED FOR RETIREMENT

REPORTING ON THE ECONOMICS OF HEALTHCARE DELIVERY

A PUBLICATION OF PNN www.PhysiciansNewsNetwork.com

The Ins & Outs of

HEALTHCARE REAL ESTATE

MARCH 2016

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Join us on Saturday, March 19, 2016

It’s never too early or too late to put your retirement savings plan in place and start taking steps toward making your dreams come true.

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Talk to a banker about retirement savings options Try the My Retirement Plan® (MRP) online tool Speak to a financial advisor at Wells Fargo Advisors* about the Envision® planning process Learn about the unique retirement planning needs for business owners Meet with a banker at your local Wells Fargo store on March 19 during normal banking hours Investment and insurance products: NOT FDIC-Insured NO Bank Guarantee | MAY Lose Value

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M A R CH 2016 | TA B LE OF CONT ENT S

Volume 147 Issue 3

14

15

FEATURE 14 Benefits and Risks of Using Mobile Apps for Healthcare 15 Keys to Being Financially Prepared for Retirement

COVER STORY

8

The Ins & Outs of Healthcare Real Estate

This month’s feature examines trends in healthcare construction nationwide and in California along with expert tips on finding the right space for your practice, negotiating a lease and meeting regulatory and safety requirements. We also look at the effects that virtual office space might have on the medical real estate industry in the future.

FROM YOUR ASSOCIATION 4 President’s Letter | Peter Richman, MD 16 United We Stand | At Work for You

Physician Magazine (ISSN 1533-9254) is published monthly by LACMA Services Inc. (a subsidiary of the Los Angeles County Medical Association) at 801 S. Grand Avenue, Suite 425, Los Angeles, CA 90017. Periodicals Postage Paid at Los Angeles, California, and at additional mailing offices. Volume 143, No. 04 Copyright ©2012 by LACMA Services Inc. All rights reserved. Reproduction in whole or in part without written permission is prohibited. POSTMASTER: Send address changes to Physician Magazine,801 S. Grand Avenue, Suite 425, Los Angeles, CA 90017. Advertising rates and information sent upon request.

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lenges of managing a practice.

LACMA’s Board of Directors consists of a group of 30 dedicated physicians who are working hard to uphold your rights and the rights of your patients. They always welcome hearing your comments and concerns. You can contact them by emailing or calling Lisa Le, Director of Governance, at lisa@lacmanet.org or 213-226-0304.

SUBSCRIPTIONS Members of the Los Angeles County Medical Association: Physician Magazine is a benefit of your membership. Additional copies and back issues: $3 each. Nonmember subscriptions: $39 per year. Single copies: $5. To order or renew a subscription, make your check payable to Physician Magazine, 801 S. Grand Avenue, Suite 425, Los Angeles, CA 90017. To inform us of a delivery problem, call 213-683-9900. Acceptance of advertising in Physician Magazine in no way constitutes approval or endorsement by LACMA Services Inc. The Los Angeles County Medical Association reserves the right to reject any advertising. Opinions expressed by authors are their own and not necessarily those of Physician Magazine, LACMA Services Inc. or the Los Angeles County Medical Association. Physician Magazine reserves the right to edit all contributions for clarity and length, as well as to reject any material submitted. PM is not responsible for unsolicited manuscripts.

The CMA/LACMA’s exclusive new Workers’ Compensation program can help your practice save money!

Savings

CMA members qualify for an additional 5% discount* on top of Preferred Insurance’s already competitive rates. Preferred’s rates are set for long term consistency, and are managed by focusing on safety and injury prevention, fraud prevention and the control of medical costs for your practice by getting employees back to work as soon as practical.

Service Mercer’s team of insurance advisors is knowledgeable about the needs of physicians and is available to walk you through the application process. Preferred’s claims examiners are experts in helping members with an employee injury or illness claim. Plus Preferred’s payroll management and flexible payment plans help you manage your premiums in the way that works best for you and your practice’s cash-flow needs.

Safety In addition to mandatory CalOSHA information and videos on workplace safety, Preferred’s team of Risk Advisors are available for consultations when you need them. They also have a strong fraud prevention policy and as a California-based carrier, they know exactly what it takes to do business successfully in this State.

Stability Preferred Insurance prides itself on its stability, which includes maintaining some of the best and most consistent pricing available for CMA members. And because of its Medical Provider Network of credentialed medical professionals, claim costs can be closely monitored and managed while providing quality care to injured employees.

Call Mercer today at 800-842-3761 for a premium indication.

CMACounty.Insurance.service@mercer.com or www.CountyCMAMemberInsurance.com.

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*Most practices will qualify for group pricing and receive the 5% discount; however some practices will need to be underwritten separately when they do not qualify for the special program terms and conditions. A minimum premium applies to very small payrolls.

Mercer Health & Benefits Insurance Services LLC • CA Ins. Lic. #0G39709 • Copyright 2016 Mercer LLC. All rights reserved. • 75258 (3/16) 777 South Figueroa Street, Los Angeles, CA 90017 • 800-842-3761 • www.CountyCMAMemberInsurance.com • CMACounty.Insurance.service@mercer.com

P RES IDEN T ’S LET T ER | P ET ER RIC H M AN, M D

T H E R E C E N T C O N V I C T I O N of Hsiu-Ying “Lisa”

“We need to develop wellness and diversion programs to maintain the health of the profession. We may then all practice medicine as we originally intended.”

Tseng, DO, who originally was arrested on March 1, 2012, accused of three counts of murder and held on $3 million bail, has raised physician awareness of several issues of importance.

Twelve patient deaths had occurred over a three-year period, but other doctors had prescribed narcotics to nine of the patients as well. She was convicted on Oct. 30, 2015 of three counts of second-degree murder in the deaths of three patients who died of narcotic overdose, 19 counts of unlawful controlled substance prescriptions and one count of obtaining a controlled substance by fraud.

She was sentenced on Feb. 5, 2016, to 30 years to life and will be eligible for parole in 30 years. The case was prosecuted by Los Angeles County Deputy District Attorney John Niedermann.

Dr. Tseng joined her husband at a clinic in Rowland Heights in general practice in 2007. A Los Angeles pharmacy alerted authorities to possible illegal prescribing by the physician. The Drug Enforcement Administration conducted an investigation that included undercover agents posing as patients attempting to obtain narcotics. Dr. Tseng wrote over 27,000 controlled substance prescriptions over a three-year period from 2007 to 2010.

She was contacted over 12 times by the coroner’s office or law enforcement officers informing her of the deaths of her patients by drug overdose. She surrendered her DEA license in 2010 and her license to practice in the state of California in 2012.

She was convicted under implied malice. According to Wikipedia, malice refers to a party’s intention to do injury to another party. Expressed malice is when there is manifested a deliberate intention to take away the life of a human being.

Malice is implied when no considerable provocation occurs or when the circumstances attending the killing show an abandoned and malignant heart. Knowingly prescribing narcotics and sedatives to addicts who have a high chance of over-

4 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

dose met these criteria, according to the deputy district attorney, especially when the physician had been notified many times of patient deaths that the coroner’s office attributed to prescription drug overdose.

Physicians in the community are concerned that they may be held criminally liable for prescription drug overdose and will therefore decrease their prescribing patterns. In the past, physicians were told that they were undertreating pain and could be liable under malpractice law for patient abuse.

That is the proverbial position of being between a rock and a hard place.

Physicians must treat pain appropriately for the benefit and safety of the patient. Performing a thorough history and physical examination, developing an assessment and describing a treatment plan are necessary components. Some patients may manipulate the physician. Documentation of a good faith effort on the part of the physician protects against legal action.

The CURES datbase now provides an additional tool. While cumbersome, it may alert the physician to a potential drug-seeking patient.

The physician may refer the patient to a pain specialist or an addiction specialist or develop a medication contract with the patient.

Physicians should not ignore warning signs. If a physician is contacted by a state or federal agency, it is best to seek assistance.

Taking CME courses in narcotic topics and adopting guidelines are other methods to show good faith.

There are consultants who will review (or develop) office policies and procedures and make recommendations to reduce risk. All of these efforts are to protect both the physician and their patients.

Lastly, Dr. Tseng did not go to medical school and spend years in training to become a “drug pusher.” Something happened along the long route to lead her astray.

She discussed untreated depression in her final defense. That may or may not be true. However, we as physicians should seek out help when we feel overwhelmed. Talking with colleagues may alert someone to unrecognized drug, alcohol or mental health issues.

We need to develop wellness and diversion programs to maintain the health of the profession.

We may then all practice medicine as we originally intended.

THE STRENGTH TO HEAL and stand by those who stand up for me.

Learn the latest treatments and play an important role in the care of Soldiers and their families. As a physician on the U.S. Army Reserve health care team, you’ll continue to practice in your community and serve when needed. You’ll work with the most advanced technology and distinguish yourself while working with dedicated professionals. You’ll make a difference.

For more information, visit healthcare.goarmy.com/eb22 or call 310-216-4433.

©2013. Paid for by the United States Army. All rights reserved.

SPONSORED CONTENT

New Physician Mortgage Program Eases Home Purchasing for Doctors BY: MICHAEL ABRAM AND MICHELLE MOLLURA

With student loan debt at an all-time high, millions of Americans are faced with the uphill battle of paying off their loans while beginning their careers. This can be especially true for new physicians.

According to the Association of American Medical Colleges, 84% of medical school graduates last year reported having an average of $180,000 in student loan debt. Tackling this debt can be especially difficult for residents who typically start out with modest salaries and little-to-no savings.

For many people settling into their careers, homeownership is a solid financial goal. But saving for a down payment can be a big hurdle to overcome. RPM Mortgage, Inc.’s Physician Mortgage Program is designed to benefit new and established doctors, dentists, chiropractors and optometrists who are licensed or in a residency/fellowship. With low down payment options, flexible qualification guidelines and no private mortgage insurance, the program is an ideal solution for those building a career in the medical profession.

Student Loan Debt? RPM’s program excludes student loan debt from the debt-to-income ratio. This is one of the main benefits that distinguishes RPM’s Physician Mortgage Program from a conventional loan.

Down Payment? For many physicians carrying student loan debt, coming up with a 20% down payment can be a real challenge. Fortunately, RPM’s Physician Mortgage Program requires only 10% down for single family home purchases and 15% down for condos.

In addition, a gift of funds from a family member or friend is permitted to help meet the down payment requirement.

Loan Amounts? Established physicians who are out of residency for at least one year may qualify for 6 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

loan amounts up to $1,250,000 on a single family residence. New physicians not yet out of residency for one year may qualify for loan amounts up to $650,000.

RPM’s commitment to meeting the needs of the communities in which we live and work inspired us to create a home financing solution to match the unique needs of the physicians who serve those same communities. RPM is proud to offer the expertise and services of Michael Abram and Michelle Mollura, two well-versed loan advisors who can help you with your financing needs.

Michael has been in the industry for 10 years and has a wealth of experience in helping clients with all types of loan scenarios. Michael Abram (NMLS #235060) is a Sr. Loan Advisor for RPM Mortgage, Inc.’s Los Angeles office. For more information on RPM’s Physician Mortgage Program, contact Michael Abram at mabram@rpm-mtg.com or at 310.995.0975.

With 14 years of real estate loan experience, Michelle understands your commitment to your practice and her commitment to you is simple: understand each client’s objectives, deliver 100% on promises and thoroughly educate each potential homebuyer and homeowner. Michelle Mollura (NMLS # 320542) is a Regional Branch Manager for RPM Mortgage, Inc.’s Palos Verdes Estates office. For more information on RPM’s Physician Mortgage Program, contact Michelle Mollura at mmollura@rpm-mtg.com or at 310.303.3401.

You are committed to your practice I am committed to finding you the right home loan

RPM’s Physician’s Mortgage Program is designed to meet your unique financial needs by offering you low down payment options, flexible qualification guidelines and no monthly mortgage insurance.

Contact us for more information about this exclusive program Michelle Mollura Branch Manager/Regional Manager 310.303.3401 mmollura@rpm-mtg.com www.rpm-mtg.com/mmollura NMLS # 320542 3500 N. Sepulveda Blvd., Suite E Manhattan Beach, CA 90266

Michael Abram Senior Loan Advisor NMLS #235060 310.574.7766 mabram@rpm-mtg.com www.rpm-mtg.com/mabram 4640 Admiralty Way, Suite 430 Marina Del Rey, CA 90292 RPM Mortgage, Inc. – NMLS# 9472 – Licensed by the Department of Business Oversight under the Residential Mortgage Lending Act. Equal Housing Opportunity.

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THE MEDICAL REAL ESTATE MARKET IS CHANGING THROUGHOUT THE COUNTRY. WHILE NEW BUILDINGS ARE BEING BUILT AND OLD ONES ARE BEING RENOVATED OR EXPANDED, MANY MEDICAL PRACTICES ARE MOVING INTO NONTRADITIONAL AREAS TO BE CLOSER TO THEIR PATIENTS. WHETHER PROVIDERS WANT TO LOCATE IN A TRADITIONAL MEDICAL OFFICE BUILDING OR IN A SHOPPING MALL, THEY NEED TO EDUCATE THEMSELVES ON HOW TO GO ABOUT FINDING, AND SECURING, THE IDEAL LOCATION FOR THEIR PRACTICE. WE BEGIN WITH AN OVERALL LOOK AT HEALTHCARE CONSTRUCTION TRENDS NATIONWIDE AND ESPECIALLY IN THE STATE OF CALIFORNIA. NEXT, WE OFFER TIPS ON HOW TO GO ABOUT FINDING THE RIGHT SPACE AND NEGOTIATING A LEASE TO ENSURE THE PRACTICE’S UNIQUE NEEDS ARE MET. A SAN DIEGO ARCHITECT WHO SPECIALIZES IN MEDICAL OFFICES, AS WELL AS OTHER EXPERT SOURCES IN HEALTHCARE REAL ESTATE, PROVIDES DIRECTION ON HOW TO DETERMINE AND FULFILL YOUR PRACTICE’S SPACE REQUIREMENTS, HOW TO MEET REGULATORY AND SAFETY REQUIREMENTS AND HOW TO NEGOTIATE A COMPREHENSIVE AND SAVVY LEASE AGREEMENT. FINALLY, WE LOOK AT WHAT IMPACT THE RISE IN TELEHEALTH SERVICES — VIRTUAL OFFICE SPACE — MIGHT HAVE ON THE MEDICAL REAL ESTATE INDUSTRY IN THE FUTURE. 8 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

TRENDS IN HEALTHCARE CONSTRUCTION NATIONWIDE LOCATION, LOCATION, LOCATION!

The familiar cliché takes on new meaning with current changes in the medical real estate market

The Ins & Outs of

HEALTHCARE REAL ESTATE CALIFORNIA HOSPITAL PROJECTS

California, along with Texas, is leading the country in real estate construction, said Hilda Flower Martin, Revista principal, in a news report.

California has $11.8 billion in projects, much of it due to the California Seismic Safety Act that mandates hospitals, by 2030, to meet strict guidelines to withstand a major earthquake.

Another reason is the fact that construction in California costs more, with an estimated price tag of $2 million per bed vs. $1.7 million for the rest of the nation, Martin said.

Though most projects in the state are renovations, there are several hospitals that are doing a complete replacement or constructing a brand-new building.

The Loma Linda University Medical Center, for instance, will replace its main campus for $1.2 billion — the most costly construction to date — and the Lucile Packard Children’s Hospital at Stanford University in Palo Alto will add an estimated 521,000 square feet to its existing 300,000-squarefoot hospital, a $1.1 billion project.

In addition to the Seismic Safety Act driving new construction is the need for off-campus buildings such as urgent care facilities, according to Martin. “There’s a movement to go into the community and away from the campus,” she said.

The Affordable Care Act has also contributed to the rising demand for medical buildings by creating in the past two years 15.3 million newly insured people needing access to doctors. Addressing that increase in terms of real estate space, Revista noted that, in 2013, for every insured person, there was 4.8 square feet of medical office space; today that’s 4.58 square feet. And another 62 million square feet would be needed to fill the gap.

A growing aging population in need of medical care — 66% of those 65 or older see a doctor three or more times a year, according to Revista — is also spurring demand for new construction.

Healthcare construction nation-

wide is booming with about $97

billion worth of new hospitals, expansions and off-campus clin-

ics and medical offices currently

under way, according to Revista, an Annapolis-based market research firm that started tracking medical construction in 2014. The

firm said 1,340 projects started

in the past year or remain in the planning phases, according to

news reports. One reason why the healthcare sector is a good investment, Revista noted, is because its

tenants — physician practices, in particular — tend to want to stay.

THE AFFORDABLE CARE ACT HAS CONTRIBUTED TO THE RISING DEMAND FOR MEDICAL BUILDINGS BY CREATING IN THE PAST TWO YEARS 15.3 MILLION NEWLY INSURED PEOPLE NEEDING ACCESS TO DOCTORS.

TOP 10 CONSIDERATIONS FOR LEASING A MEDICAL PRACTICE

While leases for medical practices are sim-

ilar to traditional leases for nonmedical offices, leasing medical space involves certain

risks and regulatory requirements that need special considerations. Ray Fox, a San Diego

architect who owns his own firm that specializes in medical offices, and others give doc-

tors who are considering leasing space this year a great platform for taking action.

1. Identify the right space for your practice |

Identifying the right medical space for your practice and specialty is the first step, said Fox. To help with this process, Fox recommends that doctors ask themselves the following questions: Where is the office located in proximity to a hospital and referring physicians? What circle of space am I looking for to fit my targeted demographic?

Fox said when he meets with clients (doctors), he likes to focus on identifying three attractive locations or buildings that can be further examined to arrive at a final decision.

One of the big issues, he said, is parking. How much parking is available? Is there assigned parking available and is it free?

Location of the space is also critical. For instance, for an orthopedist, having a space on the first floor of a building is important because they’ll see more patients on crutches and in wheelchairs.

“In LA, that’s premium space,” Fox said, which, in turn, translates into higher leasing costs.

The next step, Fox explained, is a “test fit,” or a sketch to see which space produces the best floor plan to meet the doctor’s specific needs, which is greatly dependent on the specialty as well.

“The simpler the space, the better the floor plan,” he said. “But you also need the right dimensions to fit your desired space based on the specialty of the doctor. There is a uniqueness in each specialty, and you want to react to that.”

Then there is the logistical review. The big four in leasing medical space are heating, air conditioning, electrical and plumbing needs, all of which need to be negotiated in the lease agreement.

“Most doctors have a higher electrical need due to the medical equipment, computers and technologies, which require more power,” Fox said. “We often deal with facilities that weren’t medical spaces and don’t have enough power, which is a problem.”

With the healthcare dollar being far less than in past years, Fox noted, all doctors strive to keep their overhead low. In California, he said, the average med1 0 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

ical suite costs $95 to $125 per square foot.

“As you negotiate that rate, you also want to ask the landlord to contribute to the cost to build out the suite, or the tenant improvement [TI] allowance, with the doctor paying the rest of the cost,” Fox said. Negotiating the TI allowance up front with the landlord is key to minimizing the doctor’s contribution, he said.

2. Choose a space that includes other medical offices | Fox recommends that doctors always

move into buildings that already have at least some medical space, is all medical space or will be a medical space.

“You don’t want to be the only physician in an office building,” he said. “It’s a poor choice. You want to be among colleagues and be able to refer patients.”

Other experts agree that being in a medical space also gives doctors more credibility with their patients.

3. Spell out your practice’s special needs | But

for those doctors who nevertheless decide to occupy previously nonmedical space, it’s key to work with their landlords on spelling out requirements for certain physical changes.

For instance, the medical practice may have the need for emergency care and ambulance services to the premises, perform outpatient surgery or have late-night patient visits, all of which need to be considered in the lease agreement to ensure that the rules are clear.

4. Determine the length of the lease you want | Since medical practices require installation of costly equipment, short-term leases are not practical, according to some experts. They often recommend at least a 10-year lease agreement. But Fox disagrees, saying that, especially for younger doctors or solo practitioners who want to keep their options open, a three- to five-year lease makes more sense.

“You want to give yourself an out if things don’t go as planned or if you’re growing and need more space, and then you aren’t locked into a space long-term,” he said.

5. Ensure equipment meets regulations |

Equipment such as X-ray machines, computed tomography scanners or other radiation-producing equipment is strictly regulated.

The experts say it’s critical that the doctor and landlord ensure that these machines operate safely, and the lease should provide for plans, certified by an architect, to avoid the possibility of damage to the premise and individuals.

Obtaining governmental approvals and certifications of compliance is necessary. And doctors need to understand what they need to do to comply with the rules mandated by the landlord’s or their own insurance regarding the elimination or amelioration of risk

8. Ensure confidentiality of

patient medical records |

10. Lease enough space to grow your practice | One of the big-

gest mistakes Fox sees, especially with younger docBecause doctors must give landtors, is that they shy away lords timely access to the premfrom leasing spaces that ises to make needed repairs or to leave room for growth. show the property to prospective 6. Disposal of medical “For younger guys who lenders, purchasers and tenants, waste | Another constart out in their practice, they need to ensure the confidensideration is the proper they attempt to be contiality of all medical records. The disposal of contaminated servative and are fearful lease should include a provision material and medical of paying the higher rent, to assure confidentiality and also waste in a way that’s seso they don’t get enough outline how to store and eventucure and where unauthorspace,” Fox said. ally destroy records, including for ized personnel and chilHe feels that’s a miswhen the lease ends. dren don’t have access. take in today’s healthcare environment where doc7. Comply with ADA tors need to see more parequirements | Also, tients to bring in enough doctors and the landlord revenue and run a sucmust comply with the cessful practice. He said Americans with Disabilities Act so no claim of injury many practices today rely on secondary services, givcan be based on the failure to comply with the Act. ing the example of dermatologists who also offer paFox said the majority of newer commercial buildings tients laser treatments and other services provided by meet these requirements already. nurse practitioners or other staff members.

“These add-on services augment the day-to-day 9. Responsibilities at end of lease | The lease practice,” he said. He said that doctors who have an should clearly spell out the doctor’s responsibilities at extra room to provide these services can bring in adthe end of the lease to remove alterations to the space, ditional revenue, which is important for many pracsuch as lead shielding or other special installations, tices today. and also specify what does not have to be removed.

IDEAS FOR POTENTIAL SAVINGS WHEN NEGOTIATING A LEASE Mike Norris, a healthcare tenant rep at Ezra Co., told GlobeSt.com that oftentimes doctors are unaware how valuable they are as tenants and don’t know how to use that as leverage when negotiating. He pointed to three things doctors can do to create significant savings in lease negotiations.

1. Measure the entire space | When leasing a practice, doctors should

make it a point to measure the entire space, including common areas. Often, discrepancies can work in the doctor’s favor.

2. Double-check operating expenses | Discrepancies are also com-

mon in this area when landlords are charging more than the given market rate or the pro rate share has been incorrectly calculated or when a landlord is charging for an expense that was excluded in the negotiations and lease.

DOCTORS WHO HAVE AN EXTRA ROOM TO PROVIDE [SECONDARY] SERVICES CAN BRING IN ADDITIONAL REVENUE, WHICH IS IMPORTANT FOR MANY PRACTICES TODAY.

3. Ensure code compliance by landlord | Doctors should always

ensure that the landlord is responsible for code compliance. In cases of a major build-out, some landlords may argue that the construction was the reason for the code violation and may try to hold the tenant responsible.

M A RC H 2016 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 11

T H E INS & OU T S OF H EALT H C ARE REAL ES TAT E | F EAT U RE

posed by X-rays or other machines. The liability policy should protect against claims of injury from exposure to radiation, etc., and also name the landlord as additional insured.

F E AT U RE | T H E IN S & OU T S OF H EALT H C ARE REAL ES TAT E

WHAT’S DRIVING RISING DEMAND FOR HEALTHCARE REAL ESTATE? WILL TELEHEALTH AFFECT HEALTHCARE CONSTRUCTION?

Although the demand for medical offices is rising, some people believe that the growing trend of providing remote monitoring and telehealth services, which pushes healthcare services outside of traditional facilities, could limit healthcare construction moving forward.

Bryan Mills, CEO of the Community Health Network hospital system, told news reports that his facility has been delivering psychiatric services via telehealth for years, largely to smaller hospital emergency departments with patients in crisis.

He figures that if telehealth treatment for “something labeled a crisis” can work in that environment, then regular maintenance should also work. In other words, telehealth consultations with physicians, nurses and other health providers to help patients control chronic diseases such as diabetes, hypertension, asthma, disease and mental illness would work as well.

As long as healthcare providers are able to use telehealth to improve the well-being of their patients, he said, then the number of hospital stays and more serious procedures are bound to see a downward trend. That, in turn, will translate into a need for fewer buildings as more care will be delivered virtually.

AS LONG AS HEALTHCARE PROVIDERS ARE ABLE TO USE TELEHEALTH TO IMPROVE THE WELLBEING OF THEIR PATIENTS, HE SAID, THEN THE NUMBER OF HOSPITAL STAYS AND MORE SERIOUS PROCEDURES ARE BOUND TO SEE A DOWNWARD TREND.

1 2 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

Healthcare real estate, particularly medical office properties, promises to continue to post strong occupancy rates this year, according to the experts.

With that, the trend of health systems to move into retail centers to build new medical building projects is offering patients the accessibility and convenience they expect in today’s fast-paced environment.

John Wadsworth, senior vice president for Healthcare Services specializing in healthcare real estate industries at Colliers International in Irvine, said the retail movement is driven by larger health systems competing for population and market share and also to further their “brand.”

“As consumers, we choose our doctors based on brand and quality, not by referrals so much as was the case in the past,” Wadsworth noted. “There’s more flexibility in choosing your healthcare provider, and retail spaces make it more convenient for consumers to access care.” And in today’s world, consumers expect immediate care.

“Consumers don’t want to wait for services, nor do they want to drive far to receive care,” he added.

According to the National Real Estate Investor, medical office buildings are also getting larger as smaller physician groups, not able to compete as easily

due to the new Affordable Care Act standards, are consolidating and joining larger systems.

Wadsworth agrees with the report that this consolidation trend will continue to rise.

“A big part of the strategy of the healthcare systems is to further their brand and to keep and gain more market share,” Wadsworth said. He said consolidations really picked up after the ACA was signed into law in 2010 and mandated that providers offer quality care that is rewarded based on outcome, not the number of medical services they provide. Wadsworth said this has made it more difficult for solo practitioners to sustain themselves as well.

“There is more safety in numbers, and consolidated groups have more negotiating power with payers,” he added. He said in Los Angeles and Orange counties, there has been a tremendous amount of consolidations.

“Fifteen years ago, 35% of the physician market was part of a larger group or larger system,” he said. “Today 60 to 75% of physicians is affiliated with a larger group.”

While neighborhood medical office practices have been rising in 2015, John Pollack, chief operating officer of San Ramonbased Meridian Property Co., told National Real Estate Investor that the Bipartisan Budget Act of 2015, passed last November, placed restrictions on medical reimbursement for new off-campus, provider-based properties.

The Centers for Medicare and Medicaid Services has also set up mandatory reporting requirements to evaluate the differences in reimbursement provided by off-campus and on-campus medi-

Healthcare insiders, including the American Medical Association, forecast that telehealth will continue to see rising demand.

Los Angeles-based market research firm IBISWorld, for instance, expects revenue for telehealth services to rise 40% by October 2016 through 2020 to reach $3.5 billion.

Ryan Daniels, an analyst with Williams Blair & Co., told BusinessSolutions.com that “the industry has hit an inflection point where consumers are demanding telehealth services, employers see it as cost savings, and insurers are pushing it as a benefit.”

Daniels predicts “tremendous growth” for telehealth services.

The AMA itself announced last October that it is taking steps to encourage digital medicine in clinical practices and started a sponsored workgroup to recommend additions and changes to the CPT code set related to medical services utilizing telehealth technology.

San Diego architect Fox, however, does not believe that the virtual doctor will replace the physical doctor anytime soon.

“At the end of the day, the Internet and virtual services may help patients, but it doesn’t offset the treatment they get from their doctor in the office,” he said.

cal office buildings, according to the article.

However, according to the report, pricing and cap rates for transactions involving new medical buildings appear to be stable and continue to be driven by the newly insured and providers looking for locations to expand their services.

Some healthcare insiders predict that the growing demand for healthcare real estate and rising healthcare spending will also generate higher rental income, but Wadsworth said that there are other factors that need to be considered.

“What physicians can make is finite,” Wadsworth noted. “They are tapped out.” He said the payer mix and demographic will dictate rental income.

“You can’t make a blanket statement about pricing, because it really depends on the location and mix of your demographic,” he said.

In addition, he said, new construction is driven by demand.

Before the recession, developers would build without having a commitment from tenants. Today, developers need to show at least a 50% pre-commitment from tenants to qualify for financing.

Wadsworth said he works with both physicians in private practice and bigger health systems and noted that Colliers HealthCare division specializes in healthcare real estate.

His advice: “Any physician who thinks about leasing space or buying real estate should have a good advisor who works on their behalf. Healthcare is a complex and evolving industry, and you need to make sure that advisors understand their business.”

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M A RC H 2016 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 1 3

THERE’S AN APP FOR THAT:

Benefits and Risks of Using Mobile Apps for Healthcare

BY ROBIN DIAMOND, MSN, JD, RN, SENIOR VICE PRESIDENT, PATIENT SAFETY AND RISK MANAGEMENT, THE DOCTORS COMPANY

With over 100,000 mobile health apps now available—in addition to many new tools that allow physicians to remotely monitor their patients’ conditions—physicians now have to handle an increasing amount of constant data and patient information that they did not have in the past.

Mobile apps offer many potential benefits to doctors and patients:

• Mobile apps can help patients self-monitor their conditions and can alert them and their physicians to problems before they become serious medical issues.

• Consider whether the two-way communication between you and your patient is secure and, therefore, HIPAA/HITECH compliant. Ask the vendor for assurance that the app is HIPAA-compliant and that data is encrypted for security.

• Know the app:

• Mobile apps help patients remember important information about their healthcare.

o Vendor information, such as updates, downtime, and critical value alerts.

• Mobile apps can engage patients in their healthcare.

o How will it interface with your EHR?

But not all of the apps currently on the market are approved or regulated by the FDA, and the use of mobile apps does not come without liability risks.

Physicians could face allegations of failing to educate the patient/family about the risks and limitations of the app or failing to act appropriately if the app goes offline or malfunctions. Injuries could occur if: • The physician receives information from a mobile app and does not act on this information. Physicians have a legal duty to review real-time data direct from the patient and respond. Mobile apps raise patients’ expectations of how a physician will act—the patient/family expect that the patient is monitored 24/7 and the physician will respond “within a moment’s notice.”

• The readings received from a mobile device are wrong and treatment is prescribed based on the wrong data.

Consider limiting your patients to one mobile app that you agree to monitor. This will make it easier to control the incoming data and help make the best use of the app. Other important considerations include:

1 4 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

o Is the device regulated by the FDA as a medical device? o Will you get alerts by email or a phone call from the vendor when the app isn’t working?

• Clearly communicate and educate the patient/ family about the purpose of the app and how and when the data is transmitted to the clinician.

• Avoid assuring the patient that the app will “take care of everything.” Educate the patient/family about the limitations of the app, with specific examples of instructions for the patient to follow.

• Identify a contact person within your organization to troubleshoot and be available to address technical problems.

• Have the patient/family sign a consent form that describes the risks, benefits, and purpose of the app.

• Do not do this alone! Avoid utilizing medical apps without support from your organization. _________ Contributed by The Doctors Company. For more patient safety articles and practice tips, visit www.thedoctors.com/patientsafety.

SAVING EARLY AND SAVING CONSISTENTLY

Keys to Being Financially Prepared for Retirement

BY BARRY BURKHART, RELATIONSHIP MANAGER,

WELLS FARGO INSTITUTIONAL RETIREMENT AND TRUST

Saving for retirement early in your career and being consistent in your savings habits are crucial to mapping out a comfortable retirement. Young employees might view putting aside money for retirement as something that’s too difficult to do. It’s something they believe can be done later, since the retirement date is so far away. But just the opposite is true. Simply enrolling in the plan at a young age and having those payroll deductions accrue in a pre-tax savings account is a solid strategy for starting down the path of saving for retirement.

Results from our latest Wells Fargo Retirement Study show the difference this approach can make. Workers ages 55 to 59 who began contributing to a retirement plan at an average age of 31 had amassed a median of $150,000 toward their goal of a median of $500,000, three times as much as what workers in their 60s or older had saved who started saving at an average age of 37. Six more years of savings made a significant impact, something that really stood out to me. It reinforces something our industry is well aware of: the concept of employees using time to their advantage. Younger workers who have “time on their side” shouldn’t squander this gift that some longer-tenured workers may envy.

This strategy also creates an environment for consistent savings, another key contributor to success in saving for retirement. Of those responding to our 2015 retirement study, 45% of workers 40 or older and 47% of retirees told us they had started saving for retirement from the first day they began working. This group of workers 40 or older who kept saving throughout their careers have amassed a median of $160,000 in retirement savings, exactly $100,000 more than workers who have not consistently saved. We were pleased to see that income level didn’t deter people from consistently saving. In our study, 31% of those saving for retirement from the beginning earned less than $50,000 a year.

As dollars grow in a workplace retirement plan, it can be tempting to withdraw some of it for today’s expenses. There are significant penalties that come with early withdrawals. Not only will you lose out on that pre-tax money saved for retirement, but many people in this situation also stop contributing to their retirement plan. That means you’re losing out two different ways.

People without a workplace savings plan can still be consistent savers. Subject to eligibility requirements, you can set up an automatic savings program and make systematic contributions up to $5,500 annually to either a Roth IRA (with after-tax dollars) or traditional IRA (with pre-tax dollars).

RETIREMENT SAVINGS TIPS

• If your workplace plan includes an employer match, work hard to contribute enough to take full advantage of it. If you have access to a workplace savings plan but haven’t started contributing, enroll today. Start deducting a small percentage of each paycheck and see how much you notice the missing dollars.

• Individuals contributing to a workplace plan should consider increasing their contribution amount by 1% each year. Try it for a few paychecks and see if you’re still able to pay your monthly bills. If so, keep it there and resolve to increase it by 1% next year. If not, take a fresh look next year, perhaps increasing your rate after receiving a tax refund or pay raise.

• Most plans allow workers over the age of 50 in a 401(k) plan to make catch-up contributions up to $6,000 each year, on top of the $18,000 annual deferral savings limit for all workplace plans. That’s a great way to maximize savings as retirement draws closer.

M A RC H 2016 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 1 5

AT WORK F OR Y OU | U NIT ED WE S TAN D

CMA Publishes FAQ on Meaningful Use Hardship Exception In mid-December, Congress adopted a last-minute bill that gives the Centers for Medicare and Medicaid Services (CMS) the authority to grant a blanket exception for all eligible physicians who apply for an exemption from the 2015 meaningful use penalties.

This action prevents CMS from implementing Medicare payment penalties for physicians who fail to demonstrate meaningful use of a certified electronic health record system in 2015. Many eligible professionals were unable to report meaningful use last year because CMS didn’t publish the updated regulations until fewer than 90 days remained in the calendar year.

To help its membership navigate the hardship exemptions process, the California Medical Association (CMA) has published “Meaningful Use Hardship Exception Frequently Asked Questions.” This document answers questions about the blanket exemption, including who should apply, deadlines and more.

This free members-only resource is available in CMA’s online resource library. Contact: CMA reimbursement helpline, (888) 401-5911 or economicservices@cmanet.org.

42nd Annual Legislative Advocacy Day

California physicians, residents and medical students are invited to attend the California Medical Association’s (CMA) 42nd Annual Legislative Advocacy Day on April 13, 2016, in Sacramento. This unique event for California physicians is free of charge to all CMA members. Plan to join more than 400 physicians, medical students and CMA Alliance members who will be coming to Sacramento to lobby their legislative leaders as champions for medicine and their patients. To view the tentative agenda and to register, visit www.cmanet.org. Prior to the conference, attendees will receive webinar training on legislation and policy affecting the practice of medicine.

1 6 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

CMS Publishes Final Rule on Medicare Overpayments On Feb. 8, the Centers for Medicare and Medicaid Services (CMS) published new rules on how physicians must handle overpayments from Medicare. According to the final rule, physicians must not only return Medicare overpayments within 60 days of identifying them, but they must also actively look for overpayment through self-audits and other forms of research.

While CMS does not think that the requirement is burdensome for physicians, in 2012 the American Medical Association and the California Medical Association asked CMS to clarify the look-back duties for Medicare overpayment. In announcing the new rule the agency said self-audits, compliance checks and other types of research did not represent a new government mandate.

“Providers and suppliers have a clear duty to undertake proactive activities to determine if they have received an overpayment or risk potential liability for retaining such overpayment,” the agency stated.

The new regulations come under a section of the Affordable Care Act that requires physicians, hospitals and other providers to return overpayments that they identify on their own.

One draft of the overpayments rule required physicians to look back through 10 years of claims to make sure Medicare had not overpaid them, but the final rule requires only a six-year look back.

“Specifying the length and other parameters of the look-back period provides additional clarity for providers and suppliers who have identified an overpayment,” the agency noted in a fact sheet about the rule.

Even without the new regulations, CMS said, physicians are obliged under existing law to return Medicare overpayments, and if they do not do so, they can be held liable under federal law and face exclusion from government healthcare programs.

Visit www.cmanet.com to read the overpayment regulation on the CMS website.

Upcoming Events LACMA + LA County Bar Association Educational CME Event

LACMA’s API Committee Presents: Korean American Medical Association of Southern California & Chinese American Medical Association of Southern California Dinner Program

Surviving Medicare & Maximizing Reimbursements Dinner Presentation

Empower.

Educate.

Excel.

Events of the Los Angeles County Medical Association provide physicians and their staff the opportunity to network and socialize with members of the medical community, create opportunities for their practice and meet with business professionals and policymakers in health care.

Medical Necessity & Physician Intimidation

LACMA’s Ambulatory Care Centers Committee Presents: LACMA’s Annual Vendor Fair & Program

To RSVP or learn more about LACMA event programming, please e-mail events@lacmanet.org

www.lacmanet.org/Events

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1 8 P H Y S I C I A N M A G A Z I N E | M A RC H 2016

OPENINGS—PHYSICIANS

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COMING TO PHYSICIAN MAGAZINE IN 2016 | APRIL | Connected Care: The Technology Issue | MAY | Staff & Personnel | JUNE | Medication & the Law | JULY | LACMA Welcomes a New President | AUGUST | Politics & Healthcare

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M A RC H 2016 | W W W. P H Y S I C I A N S N E W S N E T W O R K .C O M 1 9

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Success.

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Since 1977, the Cooperative of American Physicians (CAP) has provided superior medical professional liability coverage and valuable risk and practice management programs to California’s finest physicians through its Mutual Protection Trust (MPT).

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