From the Consultant’s Corner 10/1/11

Employing “Subsidiary” Physicians: What Hospitals Need to Know to Do It Right

It’s official: I must be getting old. After 25 years of working with physician practices and hospitals, I am now seeing trends come full circle.

One example is that of hospitals employing physicians. I have watched it become popular, unpopular, and now popular again. It is a topic of conversation with almost every client we work with, and I am incredibly impressed with how dedicated each side is to creating win-win relationships.

Thinking about the historical relationship between physicians and hospitals brings to mind a number of management models. The more traditional models include everything from physician representation on a hospital board to practice-hospital joint ventures. Now there’s a growing national movement toward employing physicians in “subsidiary” organizations that exist underneath the hospital umbrella. That can be a very effective management approach. But in my experience, it is important to point out that its success depends on giving physicians a direct role in controlling those aspects of practice most important to them.

Under many employed physician paradigms, hospitals recruit physicians and align them with in-house programs by medical specialty. It’s common to see an oncologist placed in a hospital cancer clinic, for example. A common drawback to these models is that they typically aren’t designed to offer physicians a governance role as well as responsibility for overseeing their clinical practice.

That harks back to the 1980s, when hospitals and physicians joined to form Health Maintenance Organizations (HMOs) in an effort to control medical costs. I would agree with many experts who believe that HMOs failed in this initiative, in part due to minimal physician involvement in decision-making. The goal now is for hospitals to employ physicians in a way that encourages them to begin building what I think of as, in essence, thriving group practices.

Functioning in an entrepreneurial mode

Over the years, the most successful healthcare organizations I know have learned that the best governance fosters physician responsibility and control over clinical operations. In line with this concept, the latest trend in hospital-physician strategic integration is the subsidiary physician organization (SPO), sometimes called a subsidiary physician company (SPC).

In this model, hospitals employ formally organized physician groups, allowing them a separate corporate structure with the hospital as the parent entity. The hospital, legally responsible for protecting its fiduciary interests, retains control over the bottom line.

The SPO operates independently on a delegated basis, with authority over clinical issues, physician compensation levels, budget, staffing, strategic alignment, policies and procedures, quality assurance, and patient satisfaction standards. Still, the SPO maintains financial operations aligned with hospital policies.

Physicians also may have a role on the hospital’s board of trustees, but through committees retain control over the operations of the medical group — especially as they relate to patient care. Both entities align with the hospital’s mission, operating standards, business practices, quality initiatives, and patient care guidelines.

In addition — and this is a point I consider essential — the hospital is responsible for providing physicians with the tools they need to develop leadership ability, communications skills, decision-making competency, and financial acumen.

Allowing physicians to practice as an entrepreneurial, multispecialty group within the hospital has significant benefits for patients, healthcare institutions, and physicians. Specifically, hospitals have recognized that conceding providers a degree of autonomy:

• Attracts physician accustomed to the private-practice model more easily
• Encourages more satisfied physician employees
• Gives physicians the authority — and willingness — to make business decisions that support financial stability

Physicians, in turn, enjoy more ability to be entrepreneurial as well as focus on patient care quality. This kind of employment with the hospital also allows economy of scale savings, more effectively managed employee benefits, and access to hospital resources including information technology (IT) staff, technicians, and expert financial planning.

In my opinion, a thriving SPO-hospital relationship requires a shared vision, balanced needs, and the ability to work through issues effectively. Hospitals can begin by identifying a small team of physicians who have the respect of their peers and a willingness to work with hospital policies, board structure, and leadership.

To represent the hospital, I advise choosing leaders who understand physicians and have their confidence. Depending on the organization and personalities involved, these individuals could include a chief of medical staff, hospital chief executive officer, or president. What matters most is that each side trusts, respects, and understands the other’s needs. In many cases, a qualified, experienced third-party consultant can facilitate the process and help establish provisions and bylaws.

The SPO offers mutual benefits to both sides, as well as a model for managing our ever-changing healthcare climate. Although hospitals give up a modicum of authority, the resulting partnership fosters fiscal responsibility, negotiating clout, and economies of scale. In the end, it’s all about finding new ways to collaborate for improved continuity and quality of care.

Rob Culbert is founder and president of Culbert Healthcare Solutions, a professional services firm serving healthcare organizations in the areas of operations management, revenue cycle, clinical transformation and information technology.

News 9/29/11

From High-Heeled: “Re: Meaning Use deadline. Your posting of the timeline for physicians  to qualify for 2011 EHR Incentive and the 90-day reporting period for Medicare could be confusing some. The 90 days for the reporting period has to all occur in 2011 calendar year, but they can attest up to Feb 29, 2012 to indicate their 90-day reporting period was October 3 – December 31,2011 (but, NOT begin their 90-day reporting period).” Thanks for the clarification from High-Heeled and others who noted I didn’t explain it exactly right in my last post. Bottom line: start your reporting period October 3 if you want to attest for 2011.

Greenway Medical announces that it is acquiring certain technology assets of CySolutions, a provider of clinical management and EHR solutions for FQHCs and community health centers. Greenway did not disclose the purchase price or the exact technologies it’s buying, but does indicate that CySolutions CEO Bill Young and other development staff members will join the company.

HHS launches the Comprehensive Primary Care initiative which will pay primary care practices $20 per beneficiary per-month for providing better coordinated care for Medicare patients. The initiative calls for participation from private and state insurance providers, requires providers to meet certain quality measures, and will eventually include a shared savings component for participants.

Medical billing company Capture Billing & Consulting forms a separate department focused on ophthalmology and optometry billing.

Blue Cross and Blue Shield of North Carolina collaborates with Allscripts to offer its EHR to more than 750 North Carolina physicians, including over 150 providers in 39 free clinics. BCBSNC will cover 85% of the cost for eligible independent physicians and 100% of the cost for eligible free clinics, including training and support.

SRS hosted its annual User Summit in Woodcliff Lake, NJ last week. CEO Evan Steele tells me the three-day event, which included an entertaining trip into New York City, was a “blowout success” with attendance at “full capacity.” Evan also forward several comments from attendees, whose reviews included such accolades as “well-organized,” “very informative,” “beneficial,” “FUN,” “relevant,” and “excellent.”  I am penciling it in as a must-attend event for next year.

Speaking of user group meetings, eClinicalWorks is heading to Phoenix this weekend. I see that if participants purchase eCW-labeled hats, visors, or wrist bands, the company will donate all proceeds to several Arizona-based charities. If you are attending, buy yourself some eCW swag and send me some pics and updates.

Stuff you can do to expand your knowledge of the industry, show your appreciation for the financial support of our HIStalk Practice sponsors, and otherwise tickle me pink: click on our sponsors’ ads to the left because they offer a lot of cool stuff you might not know about;  like HIStalk on Facebook because you know you really do like us anyway; befriend Inga, Mr. H, Dr. Gregg, and Dr. Jayne on Facebook because you can never have too many friends; link with Mr. H and Inga because we are connected with HIT’s coolest people; follow us on Twitter because you never know when we might Tweet breaking news; and, sign up for e-mail updates (top right) because it is easy to do and guarantees you will know never miss a HIStalk Practice post. And, it would be icing on the cake if you shared HIStalk Practice with some unaware soul.  Thanks for reading.

Greenway Medical reseller iPractice Group completes its acquisition of Nashville-based Doctors Access, a provider of RCM and medical billing services.

HIT outsourcer and integrator Wavelength Information Services partners with Welch Allyn to offer Wavelength clients access to Welch Allyn’s EHR Pre-Select Tool.

E-mail Inga.

News 9/27/11

Emdeon will transfer ownership and management of its US Healthcare Efficiency Index to CAQH. It monitors business efficiency in healthcare and tracks the transmission of electronic medical claims and payments.

The Chinese Community Health Care Association in San Francisco launches Apixio’s Community Search solution to provide clinical information retrieval from CCHCA’s NextGen EHR system.

Contrary to popular belief, older physicians who are clinically busier and see more complex patients use  novel EHR functionality at a higher rate than younger clinicians. Score one for the old guys.

The AMA conducts an online survey through the end of this week that lets physician practices tell vendors what billing and collection functions should be incorporated into PM systems.

Dragon Medical Speaking reseller Medical Dictate partners with OminMD to sell its EHR suite.

ZocDoc, a provider of an online doctor and appointment service, receives a Series C investment from Goldman Sachs, bringing the startup’s total funding to $95 million.

EHR and PM provider MTBC promotes David Rosenblum from president to VP of its board of directors,  Stephen Snyder from COO to  president, and Brendan Harney from assistant general counsel to VP of mergers and acquisitions.

Tick tock: eligible providers must begin their 90-day reporting period for the Medicare EHR program by October 3, 2011 to receive payment in calendar year 2011. If you miss that deadline, you still have until February 29, 2012 to begin the 90-day reporting period and still participate in the 2011 program.

4medica launches the first version of its 4medica Mobile app for smartphones and tablets.

drchrono introduces a new product bundle for its HER that includes free e-prescribing, FreeDraw, and faxing.

athenahealth’s Jonathan Bush chats with CNBC’s Tyler Mathisen about athena’s strong  stock performance (up 100% over the last year) and revenue growth (up 33% over the last year,) as well as about Meaningful Use and cloud computing.

From Archives of Internal Medicine: the use of electronic medical reminders improves the rates of vaccination, healthcare proxy designation, and bone density screening in elderly patients.

MED3OOO User Group Meeting Report
By Ulysses A. User

I just got back from MED3OOO’s three-day user conference in Palm Springs. There were some great speakers (Bruce Merlin Fried, former CMS director for the Center for Health Plans and Providers; Paul Mango, a director with McKinsey; Amit Rastogi,MD, CEO of PriMed), solid educational sessions, networking opportunities, and a bit of organized fun.

Fried was especially interesting. He provided a good explanation on ACOs (including the different flavors that have been proposed,) the benefits for providers, and the significant pitfalls for participation. His take is that based on CMS’s preliminary proposal for the Shared Savings plan, the government doesn’t quite get how difficult and expensive it will be for organizations to establish themselves as ACOs, meet all the required 65 quality metrics, cut care costs, and improve quality.

MED3OOO offered multiple tracks, including ones on their InteGreat EHR/PM products, another specifically for physicians, a leadership track, and one for its pathology services group. About a third of the sessions were not specifically related to MED3OOO products or services, but more general topics like health reform, transitioning to ICD-10, and improving practice efficiencies. The presenters were a mix of employees, customers, and a few outside consultants and vendors.

If I were to pick an unofficial theme for the conference, it would be collaboration. Not necessarily MED3OOO’s collaboration with its customers, although there was an element of that in certain discussions. As presenters provided insight into ACOs, bundled payments, and patient-centered medical homes, it hit home for me how vital collaboration will be for providers. In fact, providers risk their own financial survival unless they find ways to align with other providers and health systems. That does not bode well for those physicians who would prefer to remain in small and independent practices.

There were a number of good networking opportunities, as many of the sessions were relatively small and conducive to discussion. MED3OOO also hosted a fun offsite event at a ranch in the middle of the desert, complete with a live band, good food, and an open bar.

One of the few criticisms I have about the otherwise well-run event is that on both days, the vendors sponsoring the lunches had speakers during the meal. I’m sure the content was good, but after sitting in sessions all morning, people would rather have interacted with one another instead of hearing a product pitch.

I have attended bigger user group meetings with big-name keynote speakers and flashy entertainment. MED3OOO’s meeting was smaller scale, but no less educational, worthwhile, and fun.

E-mail Inga.

DOCtalk by Dr. Gregg 9/24/11

If It’s Good Enough for Abe …

Sometimes, as I’m sure most of you know, it is downright impossible to get any "just for fun" reading in these days between all the business briefs, e-mails, news snippets, Tweets, quoted sound bites, and … ahem … blogs. Video via YouTube, TV, Hulu, or Netflix (or Qwikster, should it survive the organizational faux pas fiascos of late) demand our time and attention while stimulating satisfying cerebral serotonin surges that far surpass anything an old-fashioned read can ever dream of delivering.

Thus for many of us, the simple pleasure of a good book or in-depth magazine article has become almost a fond, quaint, nostalgic notion from days long past – like the distant 1990s, if any of you can still remember that far back.

To my pure pleasure and enlightenment, I found time to read a wonderful little article – from start to finish! – today while flying to a conference. (Forced "unplug time"… I’m loving it! Well, until I decided to iPad this piece 37,000 feet over Oklahoma.)

Anyway, the story was in National Geographic‘s "Exploring History" and was on young Abraham Lincoln in his pre-presidential years. Describing young Abe as "born radical," it discussed the things, events, and circumstances – along with the personal predispositions – that made the most-hated man of his time also the most revered American president and one of the most-studied and quoted persons of all time. 

Most of us have the ingrained image from our school days inculcation of young Abe reading a book by firelight in his little log cabin. Maybe we remember he was good with an axe ("The Railsplitter") or that he was from Illinois (even though he actually Kentucky-born and Indiana-raised.)

But consider this: as a young man of 22 when he landed in New Salem, Illinois, a town populated by "roughs and bullies," Abe was described by one of the local residents to be "as rough a specimen of humanity as could be found." Also notable was his ability to remain poor, even "penniless," and mired in his own, self-described "national debt" for years. But one of my favorite young Abe descriptors is, "he was young and gregarious, and he liked to pull pranks, spin a ribald yarn…, and talk politics."

I love that Abe was quite the antithetical and even anachronistic man for his time, that "growing up in a land of hunters, he spurned hunting; in a land of overt religiosity, he was a skeptic and kept his beliefs private; in a frontier society preoccupied with physical labor, he disdained it; in and environment indifferent to education, he had a passion for learning; … surrounded by slavery sympathizers, he opposed it."

This delightful article left me considering why I have always found inspiration in the outsiders, in those who don’t necessarily agree with the "way we’ve always done things" (a phrase I personally find one of the most abhorrent and counterproductive of all time), and in those who aren’t afraid to call it as it is (and maybe even tell a "ribald joke" on occasion.)

Such folks, those who are truly original and unencumbered by the considerations of popular consent, are few and far between. But, I just love when I encounter one of them or the efforts which spring from their free and generative minds. 

"Free and generative" doesn’t mean "free spirited." In fact, some of the most creative and original thinkers I know are mired in obsessive-compulsive ways or are such workaholics that they might seem more lockstep than free-flowing. (Consider the hours and hours spent alone by the light of the monitor of a certain someone doling out irreverent, slightly cynical, but almost always insightful HIT commentary for a certain "News & Opinion" Web site.)

Yet, it is this same internal contrarianism which seems to spark the tinder of originality to ignition. These are the people who are the originators, who bring us all up a level, who allow us to see beyond our unquestioning “that’s how it’s done because that’s how it’s done” mindsets.

HIStalk is running an Innovator Showcase series which helps bring to the fore some of these types: the people who can see things a little differently, who can combine previously unassociated things or ideas to create novel advances, the folks who are unafraid to go against the norm.

I’m tickled to see these upstart start-ups (and I’m happily involved with one of them!) I love seeing how they challenge the accepted standard approaches and try to bring useful variants to life. Their irreverence for "what is" and their eagerness to combine the heretofore uncombined is, for me, invigorating. It is, after all, what Abe did. And, if it’s good enough for Abe … 

For a little fun and in keeping with this theme, I’d like to highly recommend this little video entitled I’m a VC: Be Smarter than Your Lawyer and Venture Capitalist. It combines the irreverent spirit of Abe and the comedic hip hop stylings of a bunch of VC white boys. How unconventional can you get? I thought of it as I was thinking about those startup innovators and thought that they — and hopefully all of you — might be able to both appreciate it and get a good chuckle from it, too.

From the respectfully irreverent trenches …

“If I were two-faced, would I be wearing this one?” – Abraham Lincoln

Dr. Gregg Alexander, a grunt in the trenches pediatrician at Madison Pediatrics, is Chief Medical Officer for Health Nuts Media, directs the Pediatric Office of the Future exhibit for the American Academy of Pediatrics, and sits on the board of directors of the Ohio Health Information Partnership (OHIP).

News 9/22/11

Sage Group PLC will sell its Sage Software Healthcare unit to private equity firm Vista Equity Partners for $320 million in cash. Sage says it will take a loss up to $108 million on the sale of the former Emdeon Practice Services, which it acquired for $565 million in August, 2007. A November close is expected.

Asking patients their race is apparently offensive to many patients, according to an article in a Florida newspaper. The health reform law mandates that physicians ask patients about their ethnicity, as well as language and other demographic questions,  for inclusion in the patients’ EMRs.

Alpine Urology becomes the first physician practice in Colorado to receive test results and other patient data through CORHIO’s HIE, using their Greenway Medical PrimeSUITE EHR.

The Rothman Institute  (PA/NJ) selects SRS EHR for its 100 provider, 14 location practice. Rothman will also leverage Universal Research Solutions’ Outcome Based Electronic Research Database to automate the collection of clinical outcomes and provide decision support tools.

Premier HealthNet (OH)  completes its four-year launch of Epic EMR at 44 practices that employ 124 physicians.

athenahealth updates its MU dashboard, which it plans to publish bi-weekly.  Highlights through September 10^th:

• 17% of Medicare providers have attested, compared to 11% as of August 27^th
• 52% of Medicare providers are satisfying the clinical summary measure, up from 32%
• 75% are satisfying five of 10 menu measures, versus 64% two weeks earlier.

To make it easier for staff and providers to fulfill the clinical summary measure, athena tweaked workflows in the athenaclinical product and added a secure electronic delivery option.

Meanwhile, meridianEMR updates its Meaningful Use Tracking Board. A month ago, meridian reported 36 attestations and $648,000 in practice dollars. At that time meridian pointed out that only about 50 total urologists had  attested, with the largest percentage meridian EMR clients.

athenahealth and meridian are the only ambulatory vendors that I am aware of that are publishing this type data. If anyone knows of any other vendors posting MU dashboards, please share.

Medical practices cut operating expenses 2.2% in 2010, though general operating costs have increased 53% since 2001 and revenues have grown only 46%.

An Australian study concludes that despite the growing use of financial incentives to reward physicians for quality care, there is insufficient evidence to support that such programs actually improve care.

E-mail Inga.