The healthcare delivery system in the U.S. is facing serious challenges, with attrition in the primary care workforce, and a worsening shortfall in overall physician manpower. This is happening just at a time when aging boomers enter retirement and a windfall of previously-uninsured people – who had accessed healthcare mainly through “rescue interventions” in hospital Emergency Departments (as high-cost uninsured write-offs), after years of postponed “preventive maintenance” – enter the mainstream of healthcare as a result of health reform.
Clearly, healthcare delivery will look very different in the next decade than it has in the past. Is has to. What does this mean for the private practice of medicine? Is solo and small-office practice dead, facing die-out over the next several years as current practitioners retire? And what does this all mean for the future of Health Information Technology (HIT) – Electronic Health Records (EHR) systems – as the nature of the healthcare workforce changes?
One notable trend is the move toward salary-based physicians working for hospital systems. A recent MGMA report of a physician survey in 2009 shows that 65% of established physicians work in hospital-owned practices, and 49% of new physicians entering the workforce seek employment there too. In some states, hospitals can hire physicians outright; in other states (such as California), where the corporate practice of medicine is prohibited by law (physicians can only be hired by professional corporations, not by hospitals), hospitals set up Foundations that own all the assets of a practice, and contract with physicians who work in them.
What is the attraction? Such settings can offer median first-year guaranteed compensation that is attractive, and reduces the down-side risk of entering an overwhelmingly complex healthcare delivery ecosystem. They also offer help with running the business – hiring staff, managing insurance billing, and setting up and maintaining an EHR.
Hospitals had gone on a doctor-buying frenzy in the past – in the 1990s there was an uptick in such activity. However, that experience was “somewhat of a disaster,” according to the CEO of MGMA, as salaried doctors found they were paid the same regardless of productivity, and therefore “the first thing a lot of physicians did is take a vacation.” The new surge in hiring physicians is based more on a base-plus-commission model, which has worked well in many industries outside of healthcare – physicians are paid a salary, plus a productivity-based overage.
More advanced models of compensation are actually 3-tiered: (1) a base minimum, protecting against down-side; (2) a productivity-based layer, rewarding hard work and staying busy; and (3) a performance-based layer, rewarding good achievement of Clinical Quality Metrics. This is a model that has been embraced by Medical Home practices. For primary care physicians (PCPs), moving away from simple fee-for-service is imperative. Much of what primary care physicians do is uncompensated work in a fee-for-service environment – managing referrals, prescription refills, disability and other forms needing review, and all the other elements that every PCP in clinical practice knows well. It should be no surprise that solo PCPs in a fee-for-service environment (which rewards procedures and volume-of-care over cognitive services) will become overwhelmed, and burn out by mid-career.
Medical Home practices deliver care to a population in a team-oriented way. Physicians, central to clinical decision-making, are not the only members of this team – nurses, mid-level practitioners, nutritionists, patient educators, and others carry out much of the care delivered to patients. A Medical Home is intensely data-driven; it cannot function without HIT tools, particularly EHRs. Not surprisingly, such practices often need the help of larger organizations (e.g. hospitals) in order to set themselves up – the management expertise needed is often not in the skillset of doctors in clinical practice.
Can Medical Homes alleviate the impending doctor shortage? Maybe. Much of the calculation of how many doctors are needed for a given population are based on patient-to-doctor ratios, derived historically. If a typical doctor has about 2,000 patients in a mature practice, then that factor is used to calculate the need in a population. However, with extenders and a whole team delivering care, orchestrated by the doctor who is oriented towards population-management, a Medical Home could manage a much larger population. Of course, a compensation model that does not rely upon one-on-one, face-to-face contact with the doctor (as is the basis of fee-for-service compensation) is necessary for this to work.
Can a current small practice transform itself into a Medical Home, in anticipation of these future trends? It won’t be easy. Clearly, Medical Homes are a building block of health reform, and Accountable Care Organizations (which require a doctor-centered medical delivery network, a cooperative hospital system, and an aligned health insurance plan all sharing common incentives) need such building blocks. To become a Medical Home, there is an accreditation pathway that ensures conformance with specific standards. Small practices can do this, but need to be in an environment where performance-based compensation is a significant part of overall income.
What does this mean for EHRs? As healthcare delivery moves from the traditional mom-and-pop approach to a more integrated and team-based future – Medical Homes in a physician-centered delivery network, or as part of a hospital system – the need for HIT data is central. Hospital-owned practices will likely utilize systems purchased, installed and maintained by their hospital. Independent practices will need low-cost (but effective and powerful) EHRs to achieve the same results. Technology is rapidly evolving in the web-based realm, where such HIT tools are now becoming available to the smaller practices – and such practices have been taking up these web-based tools enthusiastically. Such HIT, beyond simply being used to achieve Meaningful Use, can provide the tools needed for small practices, who want to endure past the retirement of the senior physicians, and give them the ability to thrive in the new environment we are facing.
Robert Rowley, MD
Chief Medical Officer
Practice Fusion EMR
