Using Health IT stimulus money to help small physician practices

Small practices worry they’ll have trouble benefiting from federal stimulus money, but it looks like they aren’t being forgotten. From iHealthBeat:

On Wednesday, National Coordinator for Health IT David Blumenthal said the federal government would pay special attention to individual physicians and small group practices as it works to implement the health IT provisions of the federal economic stimulus package, CongressDaily reports.

Blumenthal testified before the House Small Business Regulations and Healthcare Subcommittee along with pediatricians, optometrists and other health care providers concerned about being left out of federal health IT incentive programs.

Most physicians still practice in groups of 4 or fewer, so obviously this is an important segment to take into consideration. However, it’s reasonable to ask whether we should seek to preserve these small practices and why. After all, maybe they should go the way of the dodo bird, and just merge into larger organizations.

There are arguments for physicians to practice in larger groups, and this has led to an ongoing consolidation of practices. For example:

  • Larger practices can spread administrative overheadĀ  and capital costs over a broader base of activities
  • Larger practices are better positioned to negotiate with payers
  • Larger practices can provide more timely access to providers –by balancing capacity across more people
  • Larger practices can produce enough data to do internal quality improvement programs
  • Larger practices make it possible for physicians to take vacations and generally have a more reasonable lifestyle

However, there are also some downsides of larger practices. In particular they can be impersonal for patients –kind of like a factory.

Personally I prefer to see physicians who are solo practitioners or practice in small groups, especially those that don’t try to get me to see mid-level providers.

What I’d really like to see occur is for physicians to figure out how to lower the minimum efficient scale of their practices, so that small practices can provide a broader scope of activities, such as medical homes, and not get left behind in the information age. This can be done through the deployment of information tools that are geared to smaller practices, the intelligent use of outsourcing, and collaboration with larger groups for negotiating power and specialized services.

The management consulting field is one where new technology and business practices have lowered the minimum efficient scale. When I started in consulting more than 20 years ago we needed an office of at least 30 people to make it worthwhile. A “real” office needed a library (preferably with a librarian for advanced searches), report production department, phone system, copying machine and so on. But now with the Internet and associated services it’s quite possible to achieve better results with just a few consulting staff and no dedicated administrative personnel. In fact, smaller firms tend to have more reliable service providers (for things like email and file servers) than the big firms that do things in house in a more costly, less flexible manner.

Physicians should strive for something similar and ONCHIT should support them.

June 26, 2009

4 thoughts on “Using Health IT stimulus money to help small physician practices”

  1. Wonderful post!

    I feel as if I have the best of both worlds- I am part of a large faculty practice, but I try to “run” my office as if it were my private practice. The key, in my opinion, is a stable small staff – a secretary who knows the patients on the end of the phone, a nurse whose face is familiar. I long for the day when patients can access their results online and schedule appointments online, because that will free myself and my staff up from housekeeping and let us interact on more important issues.

  2. Have you read Hal Luft’s new book Total Cure? He seems to be arguing for a reimbursement system that would encourage primary care/medical home people to team up, but would allow enough flexibility for people to choose how they wanted to do that. Some of those relationships/organizations could be virtual.

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