HealthIT benefits tied to changing business models

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?