HealthIT benefits tied to changing business models
Summary: The main goal of health reform is to transform business models. HealthIT is a carrot, it makes the new model profitable. But how many doctors will cross the business model bridge?
A Health Affairs study published this week shows how the benefits of health IT only come when business models are changed. (Shown is Dr. Jay Parkinson of Hello Health.)
Doctors remain leery of social networks and even Electronic Health Records (EHRs) because they fail to see a positive impact from these technologies on their fee-for-service business model.
They're right to feel this way. The current medical business model and these transformative technologies are incompatible. That is the big hurdle health reform has to face.
In a fee-for-patient model, whether used by Hello Health in Brooklyn or Kaiser Permanente in Hawaii, productivity benefits are captured either by doctors or insurance companies. Both must scale to do this.
This fact explains the current penetration pattern of EHRs. Large groups that can capture savings in their business model adapt. Small groups and individuals that can't, don't.
Concierge medicine is one way for an individual practitioner, or small group, to capture these benefits in a business model. Associating with an insurance plan can bring the business model with it, at the cost of autonomy.
If gaining the benefits of health IT is as simple as changing your business model why don't more doctors do it?
You can answer this question by following the money.
- In a fee-for-service model the doctor can easily see the money coming in each time they see a patient. Seeing more patients means making more money.
- In a fee-for-patient model income is based on capturing patient accounts, matching the income you expect to the the services you provide each patient.
The fee-for-patient model carries risk, which goes down as it's spread across more accounts. Among the risks are those associated with the technology infrastructure, which is also reduced as it is spread across more patients.
The main goal of health reform is to transform business models. HealthIT is a carrot, it makes the new model profitable. But how many doctors will cross the business model bridge?
Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.
Talkback
Doctors really have no excuse. Some just lazy learners.
Should we wipe the staff at the location which doesnt get it or just spend more tiem training them?
This is just our example. We are hosting it ourselves, but the same company we use offers hosted services, so there really is no excuse for not changing over.
They need to know that EHR is not just about deploying technology, its about patient outcomes, tracking diseases, looking for trends and adjusting accordingly and most of all patient care. Having a record at your disposal wherever you are helps doctors get their job done quickly and efficiently.
Problems with getting the money
universal care. My belief is that it could
significantly reduce costs for companies (from one
man companies to large corporations) without
reductions in treatments.
At the same time, I believe that the greatest risk
with new programs will be the politicians looking
at very large amounts of money in the medical pie
and subsequent shifts to non-medical programs.
The fee for service approach may end up being the
only approach that continues to provide some level
of empowerment for patients.
I look at approaches like HMOs as a system where
doctors make more money by denying tests and
treatments. It's far too easy for non-FFS programs
to approach that type of problem.
"In a fee-for-service model the doctor can easily
see the money coming in each time they see a
patient. Seeing more patients means making more
money."
From what I've seen it's not really that easy for a
lot of doctors. While FFS sounds like a really
profitable approach it also encounters reductions
from both private and public 3rd party payers.
And then there are the delays in payments. I've
seen our EOBs delayed so long that the insurance
company had to add interest to the payment.
"In a fee-for-patient model income is based on
capturing patient accounts, matching the income
you expect to the the services you provide each
patient."
The other side of this coin is that your family
doctor will (hopefully) send you to a specialist that
delivers the best outcomes. Doctors are able to
learn that their income increases when they deliver
better than average outcomes. Patients are also
able to rapidly change doctors if they are not
happy with their current doctor.
RE: HealthIT benefits tied to changing business models
"The fee-for-patient model carries risk, which goes down as it?s spread across more accounts."
I disagree that Fee-for-Patient risk decreases as it's spread across more accounts.
If a concierge or medical home doctor/practice assumes that each enrollee (that's what they are) will need say 20 hrs of contact time per year on average, and an unexpectedly high number of people with COPD sign up who each need 60 hours of contact time per patient per year ... then the practice has a major problem. (Which will manifest itself in terms of long times to schedule appointments to be seen, crowding ... exactly the problems the fee-for-patient model was supposed to improve.)
We all understand that for-profit insurance companies have an inherent structural incentive to cherry-pick enrollees who are cheaper to care for than average, and to discourage enrollees who would be high utilizers.
What is apparently not as clear to many advocates is that the concierge model for physicians has exactly the same inherent incentives, except that the resource isn't premium dollars, it's hrs of physician time.
(This isn't necessarily the case for the super-super-premium-cost-is-no-object segment of the concierge business model, but how large do you think that market segment is?)
And if you are a "needy" patient (or parent) in terms of your physician care or (perhaps especially) your "health care education/support/reassurance" needs .. you are a relatively unattractive patient/enrollee compared to someone else who is a more passive participant in the process.
I'm not making judgments, I'm just trying to describe some realities as I see them.
Dana goes on to say:
"Among the risks are those associated with the technology infrastructure, which is also reduced as it is spread across more patients."
Again, I beg to differ. COSTS may be spread across larger numbers of patients, but the RISK increases as the business becomes more and more dependent on correct working of the technology on a 24*7 basis. This is particularly true when the technology (new or old) and applications are the basis of a business and financial model that is barely tested in the real-world.
d.d.