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Physicians were happy that someone was actually doing something to help them improve their patient care as well as the efficiency and profitability of their practices, Nania says. Hallmark, meanwhile, hoped the increased goodwill from its efforts would translate to improved patient volumes, though both sides were careful not to tie any assistance in the technology arena to such goals. "At a minimum it ought to help us from a retention standpoint to keep the physicians we already have," says Hoppe.

Because Hallmark already pays for maintenance and much of the capital costs, only incremental costs are passed on to doctors through the joint venture.

Hoppe says getting affiliated physicians to sign on was a "huge marketing effort." But he possessed a powerful selling point. Because the 150 affiliated physician contracts can be purchased through the joint venture, doctors are able to generate significant discounts from the EMR vendor, GE Healthcare, that wouldn't be available if they were trying to tie in on their own.

Practice management ties in
Doing it Hallmark's way was not cheap. It cost between $6 million and $8 million over two years to bring 150 referring physicians into the system. Despite that cost, Hallmark hopes to bring in an additional 50 referring physicians over time.

Hallmark built its EMR system for employed physicians with GE Centricity, one of the two choices for EMRs based on the managed care contract's incentives. In the joint venture, the board decided to stick with GE because it also offered a valuable practice management component for doctors' offices.

Even as Hallmark builds on its staff of employed physicians, finding a way to provide more services for affiliated physicians has helped soften the rough edges some referring physicians feel toward hospitals that strive to employ more of their referral base.

"Physicians are spending less time in the hospitals," says Nania, whose facility faces strong competition from the Boston area's contingent of academic medical centers. "We hope this will attract other physicians who have only sent a minor part of their business here in the past."

So is Hallmark just an outlier, or will other hospitals now look to use EMRs as an alignment tool? It's too early to tell, says CSC's Stuntz-but he's not entirely convinced.

"It removes a barrier, but I'm not convinced that it removes the major barrier," he says. For physicians, cost is perceived as a significant hurdle, so if the hospital sees providing EMR assistance as an opportunity to further its mission, such initiatives will likely become more common. But until some credible studies prove moving to an EMR improves efficiency, many physicians may remain unconvinced. Meanwhile, hospitals must do some complicated cost-benefit analyses to determine whether offering such add-ons helps their bottom line.

"It depends a lot on how competitive the market is and what their competitors are offering," says Stuntz, adding that offering an EMR to affiliated physician may become a cost of doing business in competitive markets. "It depends on whether the physician is likely to be admitting to all hospitals or whether they would be OK with admitting to just the one that offers the EMR."

Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at pbetbeze@healthleadersmedia.com.

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