Over the weekend, I read an interesting article in the New York Times on doctors giving up private practices in America. It seems that the number of physician-owned practices has declined from a relatively stable rate of 70% to below 50% in the course of three years. Who’s buying these practices? Hospitals and healthcare systems (also known as an Integrated Delivery System [IDS] or Integrated Delivery Network [IDN]).

I’m not surprised by the trend. Indeed, I’ve witnessed it firsthand. A couple of years ago, my primary care physician sold her ‘mom and pop’ practice to a large multi-facility, multi-specialty ‘big medicine’ corporation. However, I was surprised by the rate of change: a decline of 20% in three years. 

Clearly, this has wide-ranging implications for the future of health care system. As in any industry, ‘vertical integrations’ and ‘supplier consolidations’ alter its dynamics. If it’s not already done so, it will give providers more power in negotiating with private insurance payers. It could also reshape the relationship between providers and patients, thereby making it less personal and more transactional (a trend we’ve already seen with the rise of the ‘McClinic’ at pharmacies, grocery stores, shopping malls, etc.).

I suspect it will also have implications for health information technology (HIT). Given a shared pool of resources (both financial and human capital), it is reasonable to expect an increase to HIT adoption rates, as well as a general trend toward more robust and complex enterprise-class solutions. As a result, I anticipate that HIT vendors—especially those selling enterprise software to manage practices and electronic medical records—will continue to consolidate as well.          

For more information, I’d recommend visiting the MGMA web site, which includes a series of interesting blog posts on the topic of selling a private practice to an IDS.   

Yesterday, President Obama signed health reform into law. Much of the political debate and media coverage has focused on controversial issues (whether real or imagined) related to public policy. However, while not as scintillating for pundits as the likes of so-called ‘death panels’ nor as ironically amusing as the sight of senior citizens with placards telling the government to “[keep its] hands off of my Medicare,” the legislation incorporated a multitude of less controversial but equally impactful measures. These reforms included fairly significant—though largely overlooked—‘administrative simplification’ provisions that promise to bend the cost curve related to handling ‘paperwork’ for payments.  

To spread the word about these changes, I’ve put together this brief list of online resources that might be helpful for better understanding the implications of health care reform’s ‘administrative simplification’ provisions:

First, you might want to look at the actual legislation (HR 3950), especially section 1104 (starting on Page 28 for those of you playing the at home game). Then again, if you’re not looking to cure insomnia, here’s a summary of ‘administrative simplification’ as provided by Democratic Policy Committee: 

Accelerates HHS adoption of uniform standards and operating rules for the electronic transactions that occur between providers and health plans that are governed under the Health Insurance Portability and Accountability Act (such as benefit eligibility verification, prior authorization and electronic funds transfer payments). Establishes a process to regularly update the standards and operating rules for electronic transactions and requires health plans to certify compliance or face financial penalties collected by the Treasury Secretary. The goal of this section is to make the health system more efficient by reducing the clerical burden on providers, patients, and health plans.   

Second, I’d suggest you read a couple of pieces from Health Data Management in the form of a news article and a related commentary. For my part, I too wonder about whether or not the industry will be able to adjust to the pace of change over the next five years. Certainly, history suggests that delays will be inevitable. So, it’s a fair question to contemplate and something I intend to explore in more detail.

Third, because the legislation calls for the adoption of operating rules for electronic health transactions (which go beyond conforming to basic EDI standards), I’d recommend becoming more familiar with CAQH CORE. VisionShare has been a longstanding supporter of CAQH, participating actively by both helping to draft Operating Rules and implement them in our products.