Forward thinking: The future of practice trends

Changes in health care delivery are no longer floating on the horizon. They're here. Here's how they're expected to take shape.

By Mike Norbut — Posted Jan. 2, 2006

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The start of a new year is a time to look to the future. And as we enter the latter half of the decade, it seems an appropriate time to gaze at trends in practice management.

What seemed to be little specks on the horizon just a few years ago are closing in rapidly on the present. The next few years are not as much about new ideas as they are about concepts taking hold, consultants said.

These are terms physicians have heard many times before, often in the abstract: technology, consumer-driven health care, ancillary services and pay-for-performance programs. Some physicians have adopted one or more areas, while others are waiting to see the pioneers' results before diving in themselves.

These trends are gaining traction, however, and soon will be mainstream requirements for practice survival. In other words, "In the future" is in your face.

Perhaps most important, the trends are intrinsically connected and dependent on one another. For example, ancillary services help determine a practice's position on the consumer-driven health care scene, which in turn influences how a group measures up in pay-for-performance programs. Technology, of course, fuels many other trends, but it also relies on those other programs to succeed for it to provide value to a practice.

Here's a closer look at how these trends will take shape over the next few years.

Technology: Little upgrades make a big difference

While the catchphrase over the past few years has been electronic medical record, or EMR, technology encompasses much more. From practice management software to the ability to accept credit card co-payments, little upgrades are possible to help propel your practice to success in the electronic age.

Some practices tend to lump all technology purchases into one EMR basket. That leaves them feeling as if they can't afford anything or don't want to bother investing in a product until its value is proven, consultants said.

That strategy also can leave a group vulnerable as it moves forward, because its resistance to one form of technology can preclude it from adapting other useful, affordable forms.

"It starts back to basics. You can't make good decisions if you don't have good information," said Max Reiboldt, managing partner and CEO of the Coker Group, a consulting firm based in Atlanta. "Your information system is just like a good administrator. [It] will make or save you money if [it is] competent."

Many technology projects can require a significant investment, but a piecemeal approach can deliver immediate dividends, group leaders said. By investing in systems that can be used immediately, such as credit card capability and electronic scheduling, practices can start to gain efficiencies. You also won't have the daunting task of having to learn everything at once, the way you would if your practice implemented one broad technology package.

"Your technology is only as advanced as your employees," said Ira Fox, MD, an anesthesiologist, interventional pain management specialist and founder of Anesthesia Pain Care Consultants in Tamarac, Fla. "You can have the best technology out there, but if you have an employee who is new and doing the best he or she can with it, it can lead to a very long day."

Consumer-driven health care: Changing physician-patient dynamic

In the past, dealing with patients was easier, consultants said. You would sign a contract with an HMO, and a patient would choose you out of its directory. Patients rarely questioned your medical decisions, even if the HMO did, and you could trust that patients would generally follow your treatment instructions.

But with more people enrolled in high-deductible plans and using health savings accounts, physicians can expect a little push-back.

Because most patients won't meet the deductible threshold, they will be using hard-earned HSA money to pay for visits, said Nan Andrews Amish, founder of Big Picture Healthcare, a consulting firm based in El Grenada, Calif. Patients not only will expect physicians to provide quality service, they also will want physicians to justify any tests.

"The more educated and more savvy the consumer, the less leverage a physician will have," Amish said. "Doctors will have to decide how to cope. Those who come back with 'I'm the boss' responses are going to lose."

Those physicians who become better listeners and make an effort to market their practices will succeed in this new era, Amish said.

Physicians will need to consider how they can differentiate themselves and how to best promote their services, similar to how a young physician just starting a practice might have to approach the business. You'll have to start considering promotional strategies, from community outreach to advertising, to drive your unique message home to patients, consultants said.

"The avalanche is starting, and the doctors who don't prepare for it will be caught behind the eight ball," Amish said. "They need to start worrying about it now."

Ancillary services: "Can you do that here?"

While patients in the past might have been a little leery about undergoing a complicated procedure in a physician's office, today many want the convenience.

"The common question will be 'Can you do that here?' " said Tim Garton, PhD, president of the research and strategy firm Health Forecasts Inc., based in Nashville, Tenn.

Patients' acceptance of in-office services is becoming an expectation, and physicians who can't deliver what is expected could lose patients to those who can, Dr. Garton said.

Add that to the constant pressure of declining revenues and rising costs, and ancillary services would appear to be an obvious option for revenue and service enhancement.

But, as any business would analyze its market before offering a new product, physicians need to decide what ancillary services are right for their practices. You should conduct a cost-benefit analysis on each piece of equipment you plan to buy or each service you plan to offer.

Physicians need to understand that investing in a piece of equipment doesn't automatically mean it will generate profits, Dr. Garton said.

"The demand for services is not unlimited," he said. "If you're in one of those [competitive] markets, you're going to have to market effectively."

Stark and anti-kickback laws generally prohibit physicians from referring Medicare and Medicaid patients to facilities in which they hold a financial interest. There are exceptions, however, for in-office ancillary services. Doctors should consult an attorney about which services and circumstances would fall under the exception.

With the U.S. Centers for Medicare & Medicaid Services considering ways to implement pay-for-performance programs, and dozens of health plan-sponsored initiatives in place, there's no question the concept is here to stay.

"We're not the ones who proposed the system, so we're limited in our ability to pre-empt it from taking place," Dr. Fox said. "We need to be patient."

One thing that could save physicians is technology. Physicians able to measure and report their outcomes might have a stronger negotiating position when they deal with local payers, consultants said.

Those practices that do not have the technology infrastructure in place could find an ally in their local hospital. It is likely the medical centers will be able to collect and assemble the necessary data, which could help create reporting standards among the smaller groups in a community, said Jim Levett, MD, a cardiothoracic surgeon and chief medical officer of the Physicians' Clinic of Iowa, based in Cedar Rapids.

"I think most physicians feel that if programs are presented with a significant upside, they're willing to do it," said Dr. Levett, who also is treasurer of the American Society for Quality's health care division. "The key point is you have to have a tool to collect the data. You also have to have a working relationship between physicians and hospitals."

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Other trends

In addition to the major practice management trends, consultants identified other issues:

Satellite offices: Patients are spreading out, and areas that were mostly cornfields 10 years ago are booming with development. Even though they're moving farther away from the city, patients expect services to follow them. Physicians who open an office in a developing area could capture a nice share of that patient market.

Market expansion: On the heels of ancillary services comes expanding professional capabilities. If your practice consists of a single specialty, consider adding a physician from a related specialty. If you're a multispecialty group in a market that has seen a jump in physician services, consider whether all of your care offerings are necessary.

Joint ventures: Many ancillary investments are sizeable and sometimes even prohibitive for a smaller group. Physicians often band together to develop an ambulatory surgery or imaging center, but many also have found willing business partners in their local hospitals. Physicians will have to share some of the profits, but they won't have to come up with as much money up front.

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