Everyone in healthcare is currently talking about the recently released proposed rule on Accountable Care Organization (ACO). In fact, I posted on EMR and HIPAA a guest post about the ACO Legislation and its ties with healthcare IT, meaningful use and EMR. It’s definitely worth a read.

This move to ACO’s (and to some extent healthcare IT) were described nicely by Maria Todd on Twitter:

@ehrandhit Traditional HIT? The days for business as usual in healthcare ARE OVER!

April 4, 2011 11:22 am via webReplyRetweetFavorite

@AskMariaTodd

AskMariaTodd

As many have said, the ACO train has left the station. In an October article, HIStalk posted about the movement of hospital organizations acquiring physician practices and offered some lessons learned from similar movement back in the 1990′s.

An interesting analysis: hospitals are buying up primary care practices to prepare themselves to become Accountable Care Organizations, which could be the end of the line for small, independent practices. Hospitals are looking at increasing PCP salaries like a Wall Street analyst looks at price-to-earnings ratios, knowing that internists and family practitioners generate hospital revenues at nine times their average salaries, while expensive specialists generate a multiple of only five times their salary. For industry noobs, it’s time for hospitals to get taken to those 1990s cleaners all over again, because:

1. Docs sell out precisely because they don’t want to work  as hard for their new hospital employer as they did for themselves (duh).
2. Hospitals are notoriously bureaucratic and inefficient managers, making them particularly unsuited for running a low-overhead medical practice in every way from EMRs to personnel policies to regulatory compliance.
3. Private practice docs hate and distrust everything about hospitals except the money they have and don’t usually change their opinions or behaviors just because they sell them their practices.
4. Doctors resent taking orders and being told how to practice medicine, especially from suit-wearing hospital MBA-types who fancy themselves business experts despite always having worked for a paycheck instead of themselves, making it likely all these deals will fall apart in 4-5 years like they did last time around, with the docs scrambling to start up new practices without the benefit of a location, an EMR, or patients that they sold away to the local hospital in a frenzy of co-opetition.
5. Patients aren’t much more enthused about hospitals than doctors are, so they aren’t exactly thrilled to see the big sign go up over their friendly little doctor’s office knowing it’s the same folks with ED waits, bad cafeteria food, and terrible parking.

I’ll be really interested to see how these ACO organizations play out and if it is indeed the end of the small physician practice. Although, my gut feeling say that this is cyclical.

While hospitals buying physician practices is one method for creating an ACO, I’d love to hear other models that might be used to create an ACO. Feel free to sound off in the comments with your thoughts and ideas.

The following questions have been bothering me, and I don’t have answers. Maybe readers will be able to fill me in.

As far as I know, pharmaceutical companies haven’t been subsidizing or providing EMR software to medical practices, though I can’t imagine a better opportunity to a) form even closer ties with medical practices and b) get their message in front of physicians every day.

Attorneys, if you’re reading these, feel free to chime in and let me know if I’m not up to date; I realize laws governing donations to physicians are a moving target. But assuming it’s  still legal, I can’t see why pharmas haven’t jumped all over this idea.

I don’t know enough about pharma marketing costs to hazard a guess on what this strategy would generate financially, but I can only imagine it would be a winner.

Another stumper: why aren’t health plans investing in EMRs for their physicians on a large scale?

Not only would EMRs potentially improve efficiency and lower costs, they’d also give the plans an opportunity to build in real-time claims processing. That’s a huge win for both doctors and plans. From what I’ve read, health plans could save billions in paper transaction costs alone if they could use EMRs as a platform to connect processing directly.

As I see it, both of these industries have even better reasons to push EMR adoption than hospitals. Sure, hospitals need to connect with doctors, build loyalty and coordinate care, but the financial upside seems much larger — and more measurable — for pharmas and health plans.

So, this one’s on you, readers.  Why aren’t these other stakeholders getting into the game?  Hell, why aren’t employers taking a stand? (PHR efforts like Dossia don’t count in my view.)  Am I missing something here?

John’s Note: I’d like to welcome accomplished healthcare journalist, Anne Zieger, to EMR and EHR. Anne has a long history in the healthcare IT space and I’m really looking forward to her contributions to EMR and EHR. I’ll still be posting on EMR and EHR as well and of course on EMR and HIPAA. However, I’m excited to bring another voice to EMR and EHR. Welcome Anne!

Nobody said that meeting Meaningful Use standards for EMRs would be easy, but if a new Accenture study is any indication, things are even worse than they seem out there.

Accenture argues that hospitals have a a staggering amount of work to do, and that few are ready. If they hope to get to MU compliance by 2015, hospitals going to have to think differently about change management, plan for a long, tough project, spend heavily and find qualified new personnel.

According to the study, less than 1 percent of health systems were mature EMR users in 2009.  What’s more troubling is that if Accenture is right, only half of U.S. hospitals will meet MU criteria by  2015. That could mean penalties of $3 million to $4 million per year for a 500-bed hospital, the consulting firm estimates.

Why are hospitals and health systems lagging behind?  They’re underestimating how hard the MU compliance job is — and getting blindsided what can be an 80% jump in costs during the transition.

My question:  are these massive transformation headaches and eye-popping costs are inevitable if you want to prove Meaningful Use of an EMR?  Or will hospitals that run lean IT and plan well enjoy a smoother ride?

I always like it when people ask me questions about EMR. That way, I know that I’ll be providing at least some value to someone. Brian asked the following question in the comments:
Do you know who actually makes the decisions to purchase EMRs? For example, at large hospitals or medical groups, is it CIOs, and in small practices is it physicians?

This is a really hard question to answer. In fact, it’s likely one of the reasons why making the EMR sale is pretty hard. Each organization is very different. I guess this is a byproduct of the capitalist society that we live in.

That said, in hospitals, it usually is the CIO that is making the final decision to purchase an EMR after the CEO’s approval of course. Although, many times the work of selecting the EMR software and going through the EMR review process is delegated to a committee of people in the hospital organization.

The medical groups are harder to analyze since they come in all shapes and sizes. Not to mention varying governance structures. I would likely define these practices in two categories: physician run groups and manager run groups. You can guess who makes the decisions in these two categories. With that said, the doctors can really make an EMR implementation miserable if they’re not on board with the EMR selection. So, even if the practice is not physician run, you better consider these doctors in the process.

Small groups are generally more heavily influenced by the physician’s choices. Occasionally you’ll come across a strong practice manager, but usually that person is strong because they know how to work well with the doctor and their needs.

Certainly there a lot of other variations, but this is generally what I’ve seen.

Neil Versel wrote an interesting piece over on Fierce Mobile healthcare which talks about EMTs and hospitals using technology to facilitate better care for patients. Neil however argues (rightly so) that not many emergency physicians are going to make a diagnosis based on a grainy photo. Then, he goes on to talk about video. Here’s a small section of his article:

Now, imagine if doctors and nurses could provide real medical advice to help EMTs treat patients in transit based on high-quality, two-way live video. That’s exactly what they have been doing in Tucson, AZ, for nearly two years, thanks to a 227-square-mile Wi-Fi grid that covers most of the city. East Baton Rouge Parish, LA, which includes the city of Baton Rouge, recently launched a similar system that eventually will link to seven hospitals across the parish.

Tucson’s University Medical Center saves $5,000 each time it can prevent an unnecessary activation of a Level 1 trauma team and, more importantly, can save lives by providing remote diagnoses and triage and making sure the trauma team is ready while the patient is still in transit. I wrote about this technology in the May issue of Hospitals and Health Networks, but that short piece only tells part of the story.

I just love the fact that hospitals are looking at this. However, I couldn’t help but have my mind drift off into an EMR. I wonder if this same video technology won’t one day be introduced into an EMR. Only makes sense to me. Hard drives are getting bigger. Video technology is getting smaller. One day a doctor won’t need to chart at all. They’ll just have the full video.

Now we just have to ask ourselves if that’s a good or a bad thing for doctors.

UPDATE: I started thinking and seemed to remember having a similar idea before. I thought it was with recorded audio. I did some digging and sure enough back in March of 2006 I wrote about what could be a video EMR. Interesting to think how some things go full circle.