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February 4, 2009 Readers Write 17 Comments

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Recession Creates Opportunities for Niche Healthcare IT Vendors
By Alan Portela, COO, CliniComp Intl.

Admittedly, I’m typically a “glass half empty” person, but even I have to acknowledge that the economic recession has produced much-needed changes in the power balance between healthcare IT vendors and healthcare providers. With plummeting healthcare IT budgets, providers can now demand that vendors put some “skin in the game” to ensure that tangible performance goals and promised savings are obtained.

The evidence of scalped healthcare IT budgets is widespread. In a November 2008 survey from The College of Healthcare Information Management Executives, National Alliance for Health Information Technology and AHA Solutions, Inc., results indicated that 57 percent of the CFOs are delaying IT purchases. Even existing initiatives have been impacted, with 52 percent of CFOs deferring or extending those project implementation time frames.

Is there any light at the end of the economic doom and gloom tunnel? Yes, with niche technologies. Even as healthcare networks cancel their plans to replace EMRs, they are maintaining their original time frames for automating niche areas, such as high acuity, due to the immense impact that area has on IT budgets, patient safety, and quality care. The irony of our current situation is that we were at this exact point just prior to the Y2K disaster that set the industry back ten years when companies re-installed core systems that lacked strong clinical modules. It appears that the recession has kept us from making the same mistake all over again.

In reaction to the decreasing sales of EMRs, many large HIT vendors are evaluating partnerships with niche vendors rather than investing the time and financial resources to build the niche applications in-house. Thus, the traditional competition between the Samsons and Goliaths of healthcare IT is starting to morph into a mutually beneficial relationship. But the true winners in this battle are healthcare providers, who are now empowered to improve specific areas or functions within their existing infrastructure without having to replace (once again) their main HIT vendors. In essence, the HIT vendor solutions have become the platform that interoperates with new niche technologies in areas such as intensive care, labor and delivery, ED, etc.

Niche vendors will also have to adapt to these turbulent times by improving their ability to integrate seamlessly with HIT vendors, as well as changing their pricing models to reflect a risk-sharing, transaction-based model. This new model ties payment to performance on metrics such as decreased average length of stay, improved staff efficiency and retention, reduced costs, and other clinical improvements.

Aligning stakeholder objectives is a best practice throughout all major industries. It’s about time that healthcare got on the Machiavellian self-interest bandwagon.

Comments on the HIStalk Practice Interview with Garrison Bliss, MD
By RegularDoc

I can understand why Dr. Bliss is pleased with his practice model — he can see less patients and make more money. But please, let’s not sugarcoat this. He is doing a VIP/Concierge model of care that helps him and a few patients, but hurts the healthcare system as a whole.

You are not doing "the right thing." You are doing "the easy thing," and some would say "the greedy thing" — taking advantage of your loyal patients who are being told they can’t see you anymore unless they pay an extra fee. They still need their regular insurance for any test you order, any specialist they see, or if they go to the ER or get admitted. 

With that said, your costs for "easy access to your docs" are a bit less than other VIP services (you charge $600-1500 a year, where the national average is closer often $2000 a year), but it is not cheap for a lot of people. And indeed, part of your plan is to cut the patient volume you have, likely from around 2500 patients to 500 (which would net you almost $500K a year before you even saw a patient!) 

In other words, you will have more time for those 500 patients, but you have screwed those other 2000 patients, who now have to go find another doctor. And guess what — there are not that many around! 

So, in one fell swoop, you have both increased the demand for PCP care and cut the supply. How can you feel good about that? Also, when you start seeing a lot less patients, you will find that your skills are in decline, not exactly what your patients are paying you for.

With that said, I agree there is a reimbursement problem, but we docs have other options. You could have charged just $50 or $100 a year per patient. Even if only half your patients paid that, you still make a nice little profit that can help pay for EMRs and extra services like medical home. You can get an NP or similar to help with patient overload, etc.  But please, figure out a way to take care of ALL your patients, not a way to only take care of the wealthy ones (and don’t pretend that giving discounts to a few makes up for it).

And by the way, the more docs that do this, the more commoditized it will become and the prices will go down. So the VIP docs in your area are likely now nervous that you have already cut the price. The Seattle docs used to charge $2500 to $15,000. You cut price, someone else cuts price, and eventually you are going to be sitting there with 500 patients paying $200 a year and you will be begging your old patients to come back. But, they will have found someone who only charges $50 a year and you will have lost what it means to be a doctor — the trust and respect of your patients.

Sorry to be so tough on you, but I take a macro view of the healthcare system. These VIP practices are simply taking advantage of the system and indeed hurting it at a macro level, so at least be honest about that. No one has shown that they improve care, even for the small number of patients who can afford them. Even if they did, is it worth the cost and failure to the other patients you have abandoned? 

The 10th Anniversary of a Windows PACS
By The PACS Designer

TPD designed a PACS in the mid-90s with input from Hewlett Packard and learned a lot from that experience to move on to designing a next generation PACS. In the late 90s, the need arose for a high speed PACS that could handle 500MB or larger image files, so TPD decided to put some trust in Bill Gates’s Microsoft Windows NT and Michael Dell’s high power workstation offerings to meet this challenge. In 1999, the first Windows-based PACS was introduced to the marketplace.

It was a daunting task to confront the requirement to move 500MB files with minimal to no latency over long distances. First, we had to define the right network topology, and because Ethernet was the predominant network architecture, we decided to stay with that solution since it was deployed everywhere. Also, a major upgrade in the mid-nineties for Ethernet to 100Base-T from 10Base-T was making Ethernet more attractive for high speed communication.

Another widely used standard for external communications is Transport Control Protocol over Internet Protocol (TCP/IP) so we wanted to stick with that method of communications.

After reviewing the various storage solutions, we decided to use Fibre Channel. Two conflicting fiber communications methods had  been combined to remove uncertainty and the American National Standards Institute put out one standard called ANSI X3.230-1994. Fibre Channel could meet the need by the institution for one common communications method for high speed transmission of image files, data strings, and any other information from legacy systems. 

Using Fibre Channel with existing Ethernet networks also would present minimal problems provided that an upgrade to 100Base-T was installed prior to a high speed PACS was being deployed in the institution. The communications to outside facilities was left to the phone system’s SONET ring technology to enhance the ability to send image files the a central archive.

Also of concern to TPD was the different DICOM flavors that existed due to each vendor’s adding private attributes to their product offerings. Since it was going to be a PACS design that would be sold around the world, TPD decided to prevent the addition of private attributes to the new design, thus the design was setup to be "native DICOM" (no private attributes).

As of 2008, there are more than 3,000 of these high speed PACS installed around the world, and TPD is not aware of there ever being a system crash!

So today, if you are contemplating upgrading your current PACS, be aware that systems that make use of Fibre Channel and/or Gigabit Ethernet (1000Base-TX) or better will provide your institution with the most reliable PACS communications and also bring maximum efficiency to the care process.

In conclusion, the Windows PACS wouldn’t have been possible without the help of others, so TPD owes a debt of gratitude to a work colleague, Duke University for help with DICOM configurations, the Cleveland Clinic for supplying their expertise on a suitable storage solution, and Washington Hospital Center for their environmental design work for a PACS equipment room configuration without which TPD wouldn’t be commenting ten years later on a successful PACS design.

Comment on 1/23 Posting – Are Physician Portals Obsolete?
By Bud Leight

In response to the portals discussion, I believe many hospitals are overlooking a golden opportunity to improve operations and save labor costs. To date, most portal efforts have focused on access to hospital EMR data.  While this is a good first step, why not move forward and improve workflow and patient satisfaction by implementing more self-service tools found in every other service industry? 

By this, I mean provide a customer-based model that focuses on choice, improved workflow, and cost reduction. For example, physicians (one category of customer, the other obviously being the patient) should be provided convenient access (i.e. using the Internet) to self-schedule appointments, send orders, and take care of their tasks visa vie the revenue cycle for hospital based services. 

In doing so, portals offer the means to reduce labor costs and minimize office disruptions (i.e. make them more productive) on both sides (for the physician office and the hospital). For example, one 570-bed hospital serving the Virginia tidewater area, using centralized scheduling with a portal for physician offices, was able to double scheduling productivity from 5,000 to 10,000 appointments per FTE per year (since 2000). 

A large part of this success comes from the hospital offering their providers (whether owned or not) the choice to either call and schedule or bypass the phone and go online and book the appointment (which also fulfills the order requirements and completes medical necessity checking). This hospital portal provides EMR (data) access, but also a customer-centric approach that has driven 20% of their appointment bookings to come from the Internet. The patient benefits by avoiding telephone tag regarding appointment times, having the ability to review procedure directions (i.e.NPO) and not having any financial surprises if the procedure doesn’t pass medical necessity. 

Improving workflow through self-service is a big win financially for all concerned and goes a long way toward building brand loyalty with physicians and patients.

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Currently there are "17 comments" on this Article:

  1. RegularDoc –
    You concentrated on the economic piece of the model. But I believe the patient relationship piece is what will attract and retain the patient longterm. If a doc attracts me to their practice and provides time, care and attention I expect from a care provider, I will stay with them regardless of the model. Can that be provided in the managed care mills of 2500 patients per doc? Everything I read is that it’s not, and that’s why the vip model is beginning to take off.

    “but you have screwed those other 2000 patients” Dr. Bliss is likely to say that he was screwing all 2500 under the old model, because he was only able to give partial time and attention to their needs. If there is a model that will attract more students to family practice that’s a good thing. and then there will be a model and a supply of docs so no one “gets screwed.”

    Granted, it’s been found that as patient responsibility increases, utilization decreases, but that’s because over the past generation the health care financing models have produced an entitlement mentality. It’s obvious that financing model is no longer sustainable.

  2. I feel that VIP/Concierge medicine is the epitome of sleaze medicine. Dr. Blisss and those who practice this have replaced the almighty dollar first in their priorities. The Hippocratic Oath refers to keeping the good of the patient as the highest priority. There may be other conflicting ‘good purposes,’ such as community welfare, conserving economic resources, supporting the criminal justice system, or simply making money for the physician or his employer that provide recurring challenges to physicians. Obviously, these physicians have overcome these challenges in their own way and that is with greed. I have been in healthcare for over 30 years, and certainly we all continue to see vast numbers of people, including small children with no healthcare at all. I guess there are still many people totally without conscience, right Dr. Bliss?

  3. With an alarming number of new grads not choosing family practice but rather specialties because they can make more money (almighty dollar), we’ve got to rethink this.

    Either we have to take Dr. Bilss and his model seriously or we have to make med school more affordable, solve the reimb for family practice doc, pay specialists less (why aren’t they accused of practicing sleeze medicine? why can’t they be more altruistic and get paid on par with the family practice doc?). Something’s gotta give.

    The retail clinic movement is another reaction to the current state. People will pay for what they perceive as better care, i.e. time, care and attention.

  4. In response to “Recession Creates Opportunities for Niche Healthcare IT Vendors”, I think the “niche” that is also seeing growth is Internet based EHR for small to medium practices. Our company just issued a press release as we are experiencing record sales. Its interesting, however, to be calling the largest segment of ambulatory care a “niche”. The commonality is that hospitals and physicians are being smarter with their healthcare $ – they are looking for affordable solutions that provide quick ROI.

  5. @GBT-
    Your argument is flawed to me. You appear to be arguing that Dr. Bliss is doing this strictly for the ‘almighty dollar’ and as a result he has total disregard for his patients. I don’t see how spending more time with patients is hurting “the good of the patient”. Sure he is seeing approximately 2000 less patients, but I don’t think those 2000 people are outside his office asking for healthcare services. No. They’ve moved on to another doctor that fits in line with the model of healthcare they want to follow.

    There’s nothing wrong with someone who wants to provide great care to his (limited) patients while running an effective business model that isn’t weighed down by all the inefficiencies of modern healthcare.

    The story would be different if Dr. Bliss was a small-town doctor and had a monopoly on healthcare services in a town or region. This is in Seattle – where 30 seconds on google will find you more doctors than you know what to do it.

    Some might prefer to pay $2k/yr for a doctor that doesn’t know them by the 12 second scan of their chart before entering the exam room. The 12 second scan is fine for my needs and I can use that $2k on lattes…
    Others may have different priorities and that’s what this system gives.. Choice.

  6. In regards to those who seem scandalized by Dr. Bliss’s practice model, few of us non-physicians in healthcare IT are providing our services for free or greatly reduced rates for the greater good of implementing better data systems that inform medical care. Most of our organizations make decisions about which services to offer based, at least in part, on generating additional revenue to fund growth, competitive salaries, etc. Do we reasonably expect physicians to not innovate and find ways to serve a niche need if they are able to do this successfully?

    Perhaps the issue is the limited supply of graduating physicians in primary care. A few readers are of the opinion that by opting for the concierge model they are shrinking the pool of available providers. I think the medical students have made the choice for themselves to favor specialty care over primary care based on issues of pay and workload. It seems like an alternate primary care model that addresses pay and workload concerns may help to repopulate some of the family practice residency programs the go wanting for students choosing this path.

  7. Come on BJ. You dont think the doctors that practice this type of medicine do not consider the financial gains as a first priority? They have obviously sharpened their pencils, did the easy math, and determined how easy it would be to upsize their boat and summer home. And before the 2000 patients were dumped, don’t you think that they felt they had the doctor that fit in line with the model of healthcare they wanted? That was the reason they chose that particular doctor to begin with.

    I have seen many physicians who felt they did not want to work as hard and felt they were seeing too many patients. They scaled down by attrition and quit taking new patients. They did not select the wealthy or “better off” patients, and charge them a premium for healthcare. Interesting enough, I am sure that the Concierge doctors are also billing insurance. HHHmmmmmm A bit of double dipping? The dollar is not the incentive?? Give me a break..

  8. Tom Anthony
    ” It seems like an alternate primary care model that addresses pay and workload concerns may help to repopulate some of the family practice residency programs the go wanting for students choosing this path.”

    My point exactly, you said it more eloquently…

    GBT – after being run through the mill of more than clinics and docs than I can remember, never getting to a dx that made sense, only being thrown rx after rx, it was only a concierge doc that took the time with my family member, did the research, and came to the correct dx and treatment. And no double dipping. Takes no insurance. Do I care if my dollars went to purchase a better luxury item for our doc? NO, because I received real value, I spent less overall than all of the deductibles and copays running through the mills that never got to the right conclusion. And what about the cost of my family members “distress” of that wasted time? It may not be for everyone, but neither is the status quo.

  9. GBT,
    I’m not sure where you’re getting your facts from, but as I understand it they are charging a membership fee and not billing insurances. I’ve been to Qliance (not as a patient) and met the office staff, it was all front-end (schedulers) and clinical staff. They were explicit in the fact they didn’t bill insurances, but this was 2 years ago perhaps things have changed.

    Apparently you have some insight that they are ‘double dipping’… at least in your mind.

    Here’s a quote from their website: “Qliance operates outside the insurance system. As a result, we do not bill insurance plans or receive payment from insurance carriers for the services we provide. This includes Medicare and Medicaid in addition to private insurance.”

  10. Glad to see there is some emotion about this issue… let me further clarify what I was trying to explain to everyone:
    First, my point was not about the pros/cons of whether this model worked well for the docs and the patients who could afford it. Of course it does- the docs make more money and have to work less; while the patients get more time with their docs. I tried to make it very clear that my point was at the MACRO level… meaning that if Dr. Bliss and others keep moving into this model, the primary care crisis will only get worse as the demand for PCPs goes up, and demand goes down.

    Second, let’s clarify that assuming Dr. Bliss does not charge insurance for office visits or basic labs, a patient still needs to have regular insurance in case he needs a CT scan, or goes to the ER, or needs a knee replacement…

    So if you believe there are plenty of PCPs for all patients, then I understand that you have no problem with Dr. Bliss’s model – and I would agree with you – let capitalism reign and let people spend their money where they want!

    However, if you do believe there is a PCP shortage (which has been relatively well established- and was made abundantly clear in Massachussetts when they mandated healthcare coverage), then I would hope you can understand that the Concierge model is only going to make it worse. I am not saying we should outlaw it or blackball Dr. Bliss… but please, let’s not lionize this form of care- it is simply an easy way out of a tough situation for some PCPs who feel they can’t take care of everyone, and arguably it is a greedy form of business.

    So are there other options? I think that is what we need to explore.
    Can we increase the number of PCPs… we need to start chaning some things to do so, but we have said that for years with no effect… And even if we did, it will take many years, and even then – it is unlikely to quell the demand from an aging population, living longer due to science, coupled with the likelihood of more access to insurance under the new administration.

    Other scenarios include using more IT to help out, more paramedical personnel to see pts, etc…
    And a simple thing Dr. Bliss could have done was change an annual $50 fee for all 2500 patients… but waive it for anyone who could not afford it. So he could raise $100,000 and use that to support his EMR and get an NP, etc…

    Again- I’m not saying there is an easy or perfect answer, but I am saying that Dr. Bliss’s answer is good for only a small percent of the population, but bad for so many others…

    Thanks to all the posters for great dialogue…

  11. RegularDoc – Thanks for your clarification. However, the shortage of PCPs is exactly what Dr. Bliss and Retail clinics is addressing. Dr. Bliss’s model is from the doc side of things, increased pay so that the resident will choose family practice rather than a specialty; retail clinics from the patient convenience side. And the un- and under-insured are using both.

    I hear your frustration coming through, I experience it as well, but unless docs like Dr. Bliss are willing to buck the system, and force change, the macro change will take too long. We can’t wait for policy changes, as you say the aging tsunami is too close, we need more Dr. Bliss’s to challenge the status quo and take a risk to try something different.

    IT tools will help but they only address a fraction of the problem. Too many vendors and uninformed clinicians buying the IT forget that IT is just a tool, not the holy grail. (Yes, I’ve been involved in implementations where staff had that mentality). We are still several years from downloading carbon consciousness to silicon.

    And when talking about “a greedy form of business” let’s not forget the insurance payers piling on increasing layers of administrative costs. We know that many concierge docs adopted their model in response to the frustration of dealing with the payers, including the government FIs and carriers, so let’s not think government is going to help situation.

    To the issue of quality that seems to be a huge focus of the industry, the concierge model seems to address this, docs are able to spend more time and attention with patients. This can’t be a bad thing. Plus the patient is making a regular investment in their care, which should lead to greater treatment compliance and follow up care for chronic illness for improved outcomes.

    Not everyone can afford this level of care? Have you seen the increased number of HDHPs? Higher deductibles? Is this affordable? And this for the same old broken delivery mode.

    Maybe concierge is not the final model, but there’s something there that can be learned and used to form something that can address the macro issues. No, let’s not lionize this model, but let’s not throw the baby out with the bath water either.

  12. I wish to thank everyone for their input. I did not mean to open a can of worms, which I obviously did. However, there ARE some physicians that DO bill insurance while operating under the Concierge model. I think we all know that this is not right and this is “double dipping” and is probably illegal as well, and I say probably, as I have seen no laws pertaining to that. I am sure there are many physicians that do not bill insurance while operating their practices in this manner.

    Yes, we do need many more PCPs, but until our system can determine a fair way to compensate them, I am not sure that we will see a large growth of that physician population in the very near future.

    And RegularDoc, your idea of charging a $50 fee (call it an administration fee) is great to help support the cost of the EMR..

    GREAT interchange from all of you.. Thanks for your input.

  13. Concierge primary care practices is one of the few topics that really angers me. Almost every time I have seen it presented, the concept is largely presents an altruistic message of “spending more time with the patient” that “results in a better outcome.”

    This may be true but the reality is $ and time are the primary motivators. Primary care docs just want to potentially double their income to match most specialists while usually having to work much less hours on a more favorable schedule. Can’t blame primary care physicians for wanting to do this but it certainly doesn’t do anything on the macroeconomic level to health address issues with access to primary care physicians.

    As for a physician who says they largely don’t respond to financial incentives, I say BS. Physicians who work on a piecemeal rate are much more productive than their brethren on salary. There are a ton of other areas too where a majority of physicians respond to economic incentives. Doesn’t make them any different from most people but idolized physicians who have a higher value ethos than $ largely don’t exist either.

    Patients may be able to spend more time with their physicians but I am highly suspect that this results in better outcomes or reduced costs (especially if you properly adjust the outcomes/cost measures for a concierge patient mix who are much more likely to be better educated and wealthier than a typical primary care practice’s patient mix).

    I know for a fact that some researchers have tried to look into this exact question and have been met with some fierce resistance. If this model is so superior, then why the reluctance/hesitation to see if the marketing message holds any water in regards to outcomes or costs?

    My bet is that the research would show exactly what is coming out about physician-owned hospitals – that they provide neither cheaper care or better outcomes contrary to both claims. If anything, there is a clear fiduciary conflict of interest that is not being justified in terms of better quality or costs.

    One of the things I was most disappointed to see recently was that Stark backed off his restrictions on physician-owned hospitals in the recent SCHIP that was passed. Almost completely went unnoticed since everyone was yelling and screaming about insuring illegal aliens. Big dollars for certain surgeons and other select physicians with largely no benefits largely for the rest of society.

    This may be true but the reality is $ and time. Primary care docs just want to potentially double their income to match most specialists while usually having to work much less hours on a schedule.

  14. I am surprised by GBT’s postings…you make a very broad generalization stating a physician bases his practice model on the “first priority” of financial. Very judgmental in making the leaps to assumptions you state…greed, sleaze, conscious.

  15. I considered starting a VIP practice before it had a name but was chicken to strike out on my own. Let me say that if I had, it would be because I would make more money while seeing less patients. As a biproduct…no, as a marketing concept, I thought my training as an ED doc would lend itself to this value added service for those who could afford it. I can see the point about this practice aggravating the macro trend but as an individual making a living in a free market (to some degree) economy, that’s not my problem. Society doesn’t want to reimburse FP’s and internist for their cognitive skills relative to the specialist so that’s why you have panels of 2500 in the first place. I want to sell my skills and my ability to relate to my patients at a price I am satisfied with regardless of what critics will say. BTW, I wouldn’t have double dipped, the point of this model for me is to totally circumvent 3rd party payment and yes, the patients would still need insurance (which is why I consider it value added) for catastrophic events. I am there to make the day to day stuff go more efficiently for those clients for whom time is money.

  16. considered starting a VIP practice before it had a name but was chicken to strike out on my own. Let me say that if I had, it would be because I would make more money while seeing less patients. As a biproduct…no, as a marketing concept, I thought my training as an ED doc would lend itself to this value added service for those who could afford it. I can see the point about this practice aggravating the macro trend but as an individual making a living in a free market (to some degree) economy, that’s not my problem. Society doesn’t want to reimburse FP’s and internist for their cognitive skills relative to the specialist so that’s why you have panels of 2500 in the first place. I want to sell my skills and my ability to relate to my patients at a price I am satisfied with regardless of what critics will say. BTW, I wouldn’t have double dipped, the point of this model for me is to totally circumvent 3rd party payment and yes, the patients would still need insurance (which is why I consider it value added) for catastrophic events. I am there to make the day to day stuff go more efficiently for those clients for whom time is money.







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