And we have our esteemed colleague, Dr. Mergener, giving us the next talk, which is GI practice in a post-COVID world. I don't think Klaus needs an introduction, especially to the ASGE audience, as being the most recent past president of ASGE. And the background for Klaus is pretty intriguing in that he has been trained under Nobel laureates and carries MD, PhD, MD, MBA degrees, which feels like it needs three lifetimes to achieve. But he has been able to do all of that in one lifetime and continues to be engaged in many aspects of GI. He's well known for many of the activities that keep us informed, including the GI Roundtable, and has been in the past awarded as ASGE Distinguished Educator in 2015. I could go on and on, but I think it's best we hear it from him and see what we can learn in terms of how we navigate through the post-COVID world. Thank you, Klaus, for joining us live, and you are on. If you have missed the pre-conference talk by Bruce and Camille, I don't think I've ever heard a better talk describing our overall medical environment, reimbursement, and other challenges. I would highly recommend you review this and all the other talks of the morning. Since I can't top it, I thought all I would do is essentially tell a couple of stories and provide a few general observations. I won't bother you with data, and let's see how it goes. Here are my disclosures. They shouldn't be relevant. Firstly, being assigned to give a talk on the GI practice in the post-COVID world, sort of what the future might hold, is a bit of a challenge in and by itself. I always remind myself that these futuristic talks, what might happen a year from now, two years from now, are a challenge. Austin seems to have a pretty nice crystal ball. Mine is very cloudy. This here is one of the most American of all American monuments, of course, the Washington Monument. It was finished in 1884, four years after the Cologne Cathedral in Germany was finished. One of the objectives here was to top the Germans in the highest structure in the world, which was accomplished. The Washington Monument is 555 feet high. On top of it is a very heavy capstone. On top of that is a little tip, nine-inch tip, that's made out of all metals, aluminum. If I was in the room with you, I would ask you to raise your hand if you have an idea why in the world, this is a fairly soft metal, not terribly durable, why in the world would you put an aluminum tip on the Washington Monument? It has to do, and it's a little bit of the same reason, as to why Napoleon III had very expensive cutlery made out of gold and silver. Whenever he had guests, the story goes, they got this very expensive cutlery and then he had one set kept for himself that was made out of aluminum. It turns out, at that point, aluminum was the most precious metal in the world. It was very, very hard to get to in a pure state. Aluminum is a very reactive substance, usually comes as aluminum oxide and in other ways, but getting pure aluminum was virtually impossible. Until a young fellow just down the street from Bruce Hennessey at Oberlin, Ohio, when he was 23 years old, Charles Hall, developed industrial scale electrolysis of aluminum. And almost overnight, the right hand side is sort of what we associate now with aluminum and maybe with the US, just mountains of scrap metal and aluminum being one of the cheapest substances we can find now. That is all to make the point that overnight, when we think we know where the future is heading, there can be paradigm shifts and it could be the COVID pandemic, it could be a number of things, but they are unexpected and they will affect our lives and our GI practices probably more than anything that we might be able to conjure up and predict over the next year or two. So who knows what's going to happen to all of us. And if we don't believe that, there's plenty of books and these are some good reads for you to check out that obviously make that point again and you may have seen and read some of them. That's a good time to bring in Peter Thiel, who said I can't always predict how things will change, but I have a pretty good sense for what will not change. This is more the situation in the GI practice and one of my personal take home messages for myself, that whenever we look into the next year or two, the best thing to do is to look at the last year or two and see what the challenges were and in all likelihood, we're still going to be faced with the same challenges, maybe in a slightly different form. I took the liberty of digging out the very first program of the GI Outlook meeting. This meeting was actually started in Seattle in 2005 as sort of a follow up to Gene Overholt and Jim Frakes' excellent meetings, where they taught all of us how to run ASCs. But that was a very focused meeting and the idea with GI Outlook was to go broader beyond just ASC operations and talk about practice management in general. And here's the agenda from the first meeting and see if you recognize any of the topics that we might have talked about this morning, talking about practice efficiency, talking about various operations, the political and regulatory environment, including how the reimbursement issues were discussed here. And not to date, our esteemed faculty, but there were a number of folks who you will hear from today and you've seen already on the faculty then and guess what, Jim Levitt was talking about information management. It happened to be how to use the internet. I think we figured that out over the last 15 years. But the overall topic was there, interacting with payers. Dr. Schmidt talked to us about pay for performance, essentially. And that was 16 years ago now. A lot of the things we struggle with on a day by day basis have been there for a while, as we all recognize, those of us who've been around for a while. And they remain a challenge. And boy, have we seen challenges pre-pandemic. We didn't even need COVID to have to struggle in our respective practices in all kinds of ways, like the frog in the boiling water. These challenges come one by one by one, and they sort of add up. Reimbursement cuts over the last 15 years. Overall, if you take everything, our reimbursements have been cut up to 30%. Endoscopy more than other areas. Increasing costs. The MGMA estimated that over the last 10 years pre-pandemic, costs of running a practice have gone up by 50%. Payment reform has always been an issue since the Affordable Care Act. We've certainly had a lot of uncertainties trying to figure out how is that going to affect our practices? How might the payment system change? Turns out, it hasn't changed as much as maybe some of us would have predicted. And then there's already been quite a bit of talk about consolidation of hospitals and payers. And I'll bring that up in a moment again. All the while, the GI burden of disease is going up. Our services are more and more in demand. And last but not least, of course, non-endoscopic tests is a perennial topic for us. Will that replace or complement endoscopy? Or will it ever come on a broad scale? So lots of existing challenges that predate the pandemic. And as many of you know, as probably all of you know, when you look at what practices have done to meet these challenges, for me, it falls into categories of buckets and related to airplanes. And let me explain what I mean by that. Very simply speaking, as reimbursements have gone down and costs have gone up for our practices, practices have looked for other ways of creating revenue. And we've created pathology labs and anesthesia and infusion and imaging and what have you. Now it turns out there's only a limited number of buckets that can reasonably be integrated in GI practices. So that came to sort of a limit relatively quickly. We've added APPs, we've come up with GI hospitalist system, mostly all to make the physicians more efficient in the endoscopy center, because endoscopy revenues, of course, still are the main driver of income of a practice. And we've, a long time ago, started building our ambulatory endoscopy centers and learned how to run them. So all of those were strategies to deal with the challenges. And then last not least, at some point when all of this is, if not optimized, then nearly optimized, it comes down for us nowadays to reducing costs and increasing practice efficiencies. And I would argue there's still quite a bit of room for many of us to go in these two categories. We have worked on this for a long time, but as you look at various practices, you will quickly recognize, especially if you compare it to other business entities, that there's certainly still room for improvement. And that is good news in my mind, because that is one of the areas pre-pandemic and post-pandemic that I think will be key to our lasting success, is to continue to improve efficiencies and to reduce costs. We'll talk about that some more in a moment. The reason I put an airplane next to increasing efficiencies is to essentially make the point here that's very relevant when the pandemic all of a sudden hit us, which is that when we used to do endoscopies in hospital environments and then we moved it out to ASC, we essentially moved from a low overhead environment where we just provided the service and we went home, to a very high overhead cost structure, owning our own ambulatory surgical centers, employing staff, buying the endoscopes. So what happened is a transformation of our practices from low overhead to high overhead business, with significant dependence on efficient high throughput endoscopic services to create constant cash flow. And many of us really didn't give this a second thought. There was no reason to believe that the demand for endoscopic services a few years ago would go down in most parts of the country. Why would it? And then, of course, came the pandemic. So when COVID struck, it struck us in this situation where we were cash flow dependent, and we still are, in a high overhead business. This is very similar, by the way, in terms of high overhead to airplanes, and this is why the picture is there, where the fixed costs are very high, and the variable costs are very low. That is the reason when you flew pre-pandemic, there was rarely any seat left on the airplane. You want to make sure that once you've got your high fixed costs, and the variable cost of adding a passenger into an empty seat is very low, you want to make absolutely sure you optimize seating. The same is true for ASCs. And there, again, we have done an okay job, but I would argue not a perfect job, optimizing our schedules. So that's why I'm saying efficiencies are still an opportunity for us. You don't want that extra slot open at the end of the day, the three poor bowel preps, if you can avoid it, because adding patients into these open slots adds a very low variable cost, and therefore is essentially poor gravy, poor net income to you, and vice versa. So leaving these slots open loses a lot of money. So in that sense, we're quite similar to the high fixed cost business of airplanes. I hesitate to even repeat a couple of the things that by now we're all aware of, but it's just still mind boggling to me, and I need to bring it up one more time. This came out of the blue for most of us in December of 2019, starting in Wuhan and then very, very soon involving the rest of the world. At that point, you know, certainly six months later, we've all sat there saying, well, this will last a few more months, we'll have a vaccine, there's light at the end of the tunnel. And it has to be said that the tunnel seems to be predicted maybe a year ago. If you look at total cases, we're still in a linear growth time of total COVID cases in the US. Now we're heading very quickly to the 50 million mark of total cases and to close to a million of COVID deaths. So when we're talking about a post-COVID world and what's the GI practice looking like, we would have to first recognize we're nowhere near there. We thought we might be nine months ago when we created the program. But unfortunately with Delta and everything else, we didn't get there as quickly as we would have all liked. I won't belabor all the COVID data and research that's gone into virology, epidemiology, vaccine development, only to say that for the first year, we can just be glad to be living in our time and age because all of this would have taken decades, of course, to accomplish prior decades. Research has developed extremely quickly. During the first year, mostly it has to be said, coordinated outside of the US. The US for political and other reasons did not have a very laudable legacy during the first year of the COVID pandemic. But it likewise has to be said that for this past year, the second year of the pandemic, the US in some ways has led the world and certainly specifically in vaccine development and then getting vaccines into arms very quickly. Now it's extremely disappointing, of course, that we're still sitting at less than 60% totally vaccinated individuals and that has the variety of reasons that we're all well aware of. But this growth during the first half of the year, this year, has been amazing in the US and if you compare it internationally, that is the reason why our current incidence rates are actually favorable compared to some of the European countries, including my home country of Germany, where they've completely bungled and slept through early vaccination and didn't get started until mid year and still aren't vaccinating kids and so on and so forth. And they're currently seeing huge spikes again. Here in the US, this is the current situation. I don't even know if we're calling these waves anymore, first wave, second wave. Last year winter time, as we recall, huge daily numbers and then another smaller wave and another one in August, September, and now we're again on the upslope. So maybe we're not getting through the tunnel and out the other end as quickly as we would have liked. And the hope certainly is that we're not pushing these 87,000 yesterday numbers to another quarter million. But that's the situation with COVID. I have to take a moment and acknowledge that when this hit us out of the blue last year, the GI societies really came together and came together very quickly to create not just member alerts, but try to provide all of us with useful material as to what should we do in our GI practices. This came unexpected. Many of us got blindsided. We had never faced any of this and how do you shut down your practice? How do you reopen? What about testing? All of this came together within a few weeks and a number of the folks who are responsible for that are on the line with us. I want to emphasize Joe Vicari, who's with us, was leading practice operations for ASG and has done with his team, just an outstanding job. All these documents are still available. They're being periodically updated by the GI societies and I encourage all of you to make good use of them because I do believe there's still very useful material in there, even as we're now towards the end of the second year of the pandemic. Likewise, ASG staff and the staff of all the GI societies has just done an outstanding job for all of us, day and night, sometimes literally during March and April of last year, putting all of this together initially. Talking a little bit and switching to and towards what the GI practice might be facing in a post-pandemic world. These are curves that Jim Levitt kindly gave me a while back. I think it illustrates an important point. When the pandemic first hit us, if you're looking at the orange line here of practice expenses, and there's February of 2020 and the shutdown happens. And then by May, this practice here was in a position where they were able to reduce expenses. This time, number one here, quick expense reduction through furloughs, through negotiating better deals, through additional reduction of waste, was a key measurement of practice success. And this is only possible in situations that come totally unexpected to you if you have your practice on very solid foundation, with professional management, with the ability to bring teams together to consider what needs to be done and then to act quickly. And likewise, on the revenue side, from the time the shutdowns happened to the time that you could create revenue repair through having established telehealth, retooling your workflows, getting PPE and testing policies in order, and so on and so forth. All of that doesn't happen very easily in a less organized group where no one really knows what should be done first, second, third. So professional management was one of the predictors of how practices did early during the pandemic. And I would submit that that's an important point for us to remember going forward because the pandemic may be the only one you see in your professional lifetime, but unexpected challenges probably are not. And it behooves all of us to invest in a solid foundation. So we've clearly learned we're not immune to unexpected calamities. And as I said, we learned we need to be prepared. And the basics of practice management matter. So if you ask me what's important to the success of the practice post-pandemic, I would tell you the exact same things that were important pre-pandemic, which is you need to invest at the time when it may not be obvious that that investment yields immediate return on investment. You need to invest in professional leadership. Networking is critically important. You don't need to reinvent the wheel all the time. So learn from each other. Do what you're doing today. Go to these conferences. And not only that, but stay in touch with the faculty and the other attendees after the conference. A foundation is most important in times of hurricanes. And it needs to be late before the hurricane hits. This was already beautifully addressed by Harish in his talk from a couple of angles. I think if I personally had to say what was the main learning for me during those months of pandemic, and still is, it is the reminder that in a technical specialty like ours, where we're often focused in our endocenters on doing procedures, on doing ultimately assembly line work and doing it quickly and efficiently. This was a great reminder that communication is just at the heart of everything we do, even in a procedural specialty. Communication with patients, explaining to them the safety of what we do, bringing them back into our practices. But as has been said before the lunch break, also with our staff members, with everyone essentially. And we, like Harish and many others, have implemented frequent huddles. We had those pre-pandemic, but I would say not with the same vigor and regularity as we do now. Every morning there are huddles and staff updates as to what's going on. And I think we will continue that and it'll serve us well. So it really comes down to developing that culture of teamwork. And once again, especially during the very tough times that yields very important returns. So in terms of the practice at the end of the tunnel, the end might still be a bit further away than we would like, but I would submit that as Peter Thiel was saying, just thinking about what will not change will be determined by the macro environment in this country, which is essentially not only very costly, but broken health system. And one that's just amazingly complex. I have shown the following four slides very often, and I will go through them quickly. But just as an illustration again of how crazy costly the US healthcare system is, if you list all the countries by gross domestic product, the US of course has the largest economy followed by China and Japan, Germany. Now in Germany, with all the schnitzels that are produced, all the Mercedeses, BMW and everything else, if US healthcare was a country, the healthcare costs would be almost surpassing Germany in terms of the trillions of dollars. And Germany is a country of 85 million people. So that is what we're spending every year. This is pre-pandemic numbers, but they still hold up with some adjustments now. This is what we're spending. It's crazy expensive. And unfortunately for us, we don't need to go through each pie slice here, but the two upper ones, the blue and the orange ones, essentially delineate the spending that physicians help control, which is in the hospital and just physician services in general. So guess where, if the country has a need for cost reduction, guess where cost reductions will happen. In other words, we can fully anticipate that our reimbursements for our services will not go up, will continue to go down. And we just unfortunately have to get used to that state. And just very quickly in terms of the complexity, Hoover Reinhart, the late Princeton economist, did a lot of just absolutely genius things, but the most genius of all is to illustrate how complex the US healthcare system is. In comparison, for example, Germany, which you can illustrate like this, 90% have public insurance, 10%, if they're well off, can purchase additional insurance. And off you go, everyone at every age has insurance. As Hoover Reinhart points out, who was an art connoisseur and walked through a museum once and saw a Mondrian painting, it gave him the idea that's what US healthcare looks. First of all, you have to distinguish between the young and the old and the working people and the poor and the rich. And then for every one of these boxes, we have different ways of reimbursing providers. So you have the Medicaid program for the young and all of the poor. You have for all the employed, the biggest category, you have about 1,000 insurance companies that provide insurance products here. You have for the very rich, you have Disneyland. Down here for the old, you have Medicare. Some of them, the near poor are uninsured still after the Affordable Care Act. Some of them have their own way of getting insurance. Some of them are dual insured with Medicaid. And this little square here of the older people that are near poor, you have the Quimby's, the Slimby's, the Q1I, the QDWI, and the QI2. And I don't have time to go into the abbreviations, but that is just the simplified way of talking about U.S. healthcare. So crazy complex. And I'm showing this in such detail to make the point, in a very costly system that's extremely complex, we cannot expect any quick and immediate solutions to our conundrums of losing a little bit more money every year and how can we best make it up. Now COVID is going to accelerate some of the headaches. We'll have to see what the ultimate economic downturn is. Currently the latest unemployment rates were not that unfavorable. They went up as high as 14%. Now they're down to 4.6%, still slightly higher than pre-pandemic. However, that is artificially propped up, as we all know, through CARES Act and other subsidies that just recently ran out. If there are significant shifts in health insurance, people losing employment, University of Michigan has calculated that for every percent of their patients that transition to Medicaid, they will lose 8 to 10 million annually in net profit. So we'll have to see how that develops for us. Secondly, we're seeing national debt for a number of reasons go up. And once again, how that affects our practices remains to be seen, but there's definitely no money for higher reimbursement. We will be doing more for less. And once again, smaller profit margin, if the road narrows, you better don't weir too much left and right. In our practice, that translates to have professional management, as I said before. So the GI practice post-COVID is going to look like the GI practice pre-COVID, only turbo, as a friend of mine said. I'm not sure about the grammar here, but that's an original quote. The path forward, the turbo challenges, once we're used to dealing with the backlog that the COVID pandemic produced, and that makes us have to increase efficiencies and try to right-size physician and staff workforce. We've talked a lot about IT this morning, and I do believe for the practices that have not had a chance to invest in IT infrastructure, that will be an absolute necessity for a number of reasons. Obviously, because we're going to continue with some virtual visits, but probably more important for data collection. Jim Levitt and others have educated us for many years on the need to collect data and then be able to use it in our payer negotiations. And while the payment system has not changed away from fee-for-service as quickly as we would have thought, this trend will continue and we better make sure we're prepared for it. And we are seeing in many practices now some products out there where shared savings models are being employed, but without you knowing your true cost of care for a certain episode of care, that's impossible essentially when we go into these kinds of payer discussions. Ultimately, one hope that I think is realistic, especially in a costly broken system, is the possibility of moving more care to ambulatory care. I must say I'm less skeptical than Camille in her talk this morning about site-neutral payment systems. I think there's a good possibility, just analogous to shared savings models, that we will be able to make the point that ASCs ought to be able to be reimbursed more if hospital outpatient payments can be brought down. Whether or not that's going to happen, we will have to see. Last but not least, hospitals and payers consolidated. Our practice environment has started consolidating over the last decade, accelerated in recent years, even pre-pandemic, by private equity coming into our space. That trend can only accelerate for all the reasons I mentioned. We have a limited way of increasing efficiencies, most importantly, sharing cost. As much as I don't like it, I don't see how over the next 10 years we will manage without being able to get larger. Now, in terms of what's the best model here, whether or not this is truly private equity or we find a way to accelerate practice mergers in some other way or find other partners, I don't know. Payers, to me, would seem the more natural partner if we're talking about cost containment and increasing quality of care. More natural compared to private equity. And there's interesting models out there in the orthopedic and some other spaces with Optum Healthcare, which is part of United. But given the fragmented payer system that we're in, that may or may not be feasible. Private equity, I personally find interesting. I would highly encourage everyone who's thinking about it to be doing due diligence and making sure you're trying to get larger, not for the sake of getting larger, but for the sake of getting better and having more clout. And there are private equity models out there. You've seen one. You've seen one. They're all different. Some of them create very large entities that are still not very well coordinated. And I don't know that that ultimately can be the winner. So I would encourage everyone to take a very, very close look at the different models before considering to join one of these platforms. The age of corporate medicine, however you want to call it, I think in this country with its healthcare system is inevitable for all the reasons I mentioned. And it behooves us to make sure that it won't look like on this comic. It won't be assembly line medicine. We will still be in it for all the right reasons. We're going to try as much as we can to push the system to not let it get to this kind of a setup. Corporate medicine can look the way we all want it to look. We just need to keep involved and keep pushing in the right direction. So I will quickly go through this. My last text slide here, and mostly because many of these aspects have been touched on by Seth and Horatian and some of the other folks, I was sort of thinking on a more nitty gritty level as we go back to our practices and our endocenters, what's going to be new under the sun with apologies to the ecclesiastics in terms of what we need to think about for our endocenters. I think the push towards non-endoscopic screening has accelerated during COVID, and it's something that other countries that Kaiser, the VA system does. While we all think that colonoscopy is the best way to screen our patients, the reality is we don't really know. The confirmed trial will give us important information, but that's still five years off. There's a very good chance that we might join the majority of other countries and go to a non-endoscopic initial screening for colorectal cancer. On the good news side for us, as we all know, 30% of eligible folks currently are not getting screened at all, so whether or not this really leads to a significant drop in colonoscopy is unclear. In terms of new gadgets and new techniques and technology, Seth has given us a great overview. There is interesting stuff out there. I'm just not sure that from our perspective of folks in independent practice, without significant reimbursement attached to it, many of these things, simple suturing, resection technologies, really make sense for us in the ambulatory sector in the short run. There are some very interesting new scopes out there, new technology that might reduce the capital investment quite significantly. By that, I do not mean single-use scopes, which I find a problematic proposition, but reusable scopes with new technology yet to be announced that might make our capital investment in scope quite a bit more favorable. We will see very, very quickly over the next year or two scopes that essentially give us a circumferential view, including behind folds. So that should help our quality of care. And if they come at no increase in price, I think that will be something we'll adopt quickly in our ASCs. There are some models about innovative scope purchasing more akin to the certified reused CAR programs that are out there that I think practices will find quite attractive when you see them. AI, AI, AI, we've talked about it in many talks. I think it will clearly transform our practices. However, every time I look at any of these proposed models, the question is, if it comes at incremental costs, how soon are we going to implement it? I am doubtful that we do it. I fully expect AI, the basic stuff that you heard about, polyp detection characterization, to be in the box for all the large scope makers within a year or two. I don't think there's any doubt they all have excellent products, sometimes already on the market in Europe, and it'll come here. More interesting are some of the AI applications to me that help track patients and staff through our offices and the ASCs, and that, again, might help us increase the efficiencies. So that's my not very gratifying, if you will, view of the GI practice. I would say, to sum it up, the challenges pre-pandemic are the same challenges we're going to face post-pandemic. What do we do about it? Professional management is key. Networking is key. Consolidation, I think, is inevitable. Unless there's a new aluminum paradigm shift that's happening that will save us magically, I think the old challenges are what we need to continue to work on. And I just want to take the liberty of the speaker and go two additional minutes over my time to make everyone aware ASG is actually, this month, turning 80. The founder of our society, Rudolf Schindler, was German-born, had to flee the Nazi regime, and founded ASG in November of 1941. Now, Seth mentioned that he is the inventor of the flexible gastroscope, and that is correct, but his claim to fame actually came long before then, 10 years before, because he also developed and optimized the rigid gastroscope. This is one of the only existing, still original textbooks that he wrote. So he dominated endoscopy over an amazing three decades, from the early 20s to the late 50s. And the reason I bring this up is not just ASG's birthday, but he dominated our field, because obviously he was brilliant, he was determined, and all of that, and he took a very scientific approach. But he dominated also, largely, because he always sought partnerships. The Schindler scope's not called the Schindler scope, it's called the Wolf-Schindler scope. Wolf was the instrument maker, and there were plenty of other colleagues who were trying to optimize gastroscopy, and they failed compared to Schindler, because Schindler was always willing to seek out our industry partners, to seek out partners in the field, colleagues in the field, to drive his studies. And that, I think, is a mindset that we can still remember today, as we're trying to optimize our practices. So lots of challenges. We're going to keep pushing the rock up the hill. Unfortunately, this is the new normal. We better get used to it. But in my naive view, I'm hoping that as it's an uphill struggle every year, maybe it's good for my glutes. So thank you again for inviting me, and I very much appreciate the course organizers putting on this wonderful conference. Thank you.

Dr. Klaus Mergener

GI Practice

Post-COVID World

Gastrointestinal Practice

Practice Management

COVID-19 Impact

Technology Advancements

Communication and Teamwork