There will always be an uneven distribution of physicians, says Lori Schutte, president of St. Louis-based Cejka Search, a physician and healthcare executive search organization. "Everyone wants San Diego and Miami. No one wants to be in Decatur, IL, or Sullivan, MO. Locale is the No. 1 issue: Physicians want to be where they want."
Physician practices may not be able to change their location, but tailoring recruitment packages to individual physician needs and offering competitive compensation can make the difference and bring docs on board.
The top three recruitment strategies most frequently cited by medical groups as important are all financially focused, as shown in the following survey findings from AMGA and Cejka Search:
Market-based compensation: 65%
Income guarantee: 61%
Signing bonus: 42%
"You have to offer a competitive compensation package. But what competitive means can vary from place to place, and laws of supply and demand are forces even with human capital such as physicians," says Schutte. "We've had clients in major metro areas that don't need to offer the same compensation as someone in a rural setting."
New era of recruitment
The compensation data out today are two years old, says Schutte. Organizations need to make sure that what they are offering is competitive in their market. For example, three years ago, half of Cejka's clients offered a signing bonus. Today a signing bonus is expected, says Schutte. "What used to be, in the past, an incentive-the carrot-has now become the norm. People are looking for more and more different ways to distinguish themselves."
The industry has also come to terms with the knowledge that there really is a physician shortage, so medical group practices are being much more flexible with candidates, says David Nyman, manager of physician recruitment at Marshfield (WI) Clinic, a nearly 800-physician multispecialty group practice. "Ten years ago, if someone said, 'I want to be a part-time,' the answer would have been no," Nyman says. "Now if someone says that, we'll do anything we can to make any sort of option work for the individual."
Organizations are also offering many more incentives, such as student loan assistance or recruitment incentives. "People are coming out with $200,000 in student loan assistance," says Nyman.
Organizations need to be proactive. Nyman asks his more recently trained physicians to contact their program or colleagues about job opportunities at Marshfield.
"There are surveys of how candidates find jobs, and usually No. 1 or No. 2 is referral from colleague," he says, adding that the referring physicians also receive a small monetary incentive.
Another trend is hiring people further out. "We are targeting first-year residents," Nyman says. "We are willing to sign them now and pay them a small stipend while they are training." It's not a lot of money, but an extra $1,000 per month for residents on a tight budget makes their lives easier, he says.
"It is a way to distinguish yourself, and you may offer that [stipend] in replacement of a signing bonus or offer less of a signing bonus and a stipend," says Schutte. "It says to the candidate-you are committed to us. There is something about signing a piece of paper."
Recent family medicine graduate Amy Muminovic, DO, says that student loan assistance, sign-on bonuses, flexible scheduling, housing stipends, and comprehensive tours are all effective tools for recruitment. However, "new grads often find that some of the most lucrative offers may be compensating for a burnout lifestyle," Muminovic says.
Tailor your plan to the doc
As the saying goes: What one physician wants, one physician wants. For example, a doctor who is 10 years from retirement may want to relocate to be closer to family and may be willing to trade some compensation for more flexible hours. On the other hand, a physician who is only a few years out of school is in his or her peak work years and will probably prefer a productivity model.
It is important to know what is driving physician candidates and be able to adapt your model to that situation, says Schutte. In today's environment, "the more progressive groups realize that's what they have to do."
Tracy Geiger, MD, a family medicine doc who recently finished his residency and will start practicing in Phillips, WI, in August, looked first and foremost at the guaranteed salary along with the sign-on bonus when interviewing physician practices. "I weighted these higher because my school loan is less than half the average these days for other residents, and I would rather have the freedom to use benefits as I see fit instead of being locked into something like a housing or school repayment loan," Geiger says, adding that he was impressed when practices had flexibility in what they could offer. Flexible scheduling was less of a concern for Geiger, who is "raring to go," but he is happy to know it is an option for the future.
"Loan burdens are substantial, so repayment packages are often the most persuasive financial incentive," says Muminovic, a mother of two who is starting her medical career by relocating from Phoenix to a small town in Wisconsin. "Our profession demands time away from family and personal recreation, and reclaiming this time in the form of continuing medical education, vacation, limited call, and flexible scheduling can sweeten a small salary."
Recruiting a primary care physician today is becoming less about the money and more about humanistic rewards. "Most people do not rush into primary care to get rich, but to have a rich life," she says.
The interview experience matters
Having a red carpet interview process is essential, says Schutte, explaining that even the little things in a candidate's visit can have a huge impact. For example, making a candidate wait in the lobby for half an hour without being greeted will not create the best first impression-especially when another practice may greet that same candidate right away, provide an escort to show him or her around, and answer questions.
Geiger says when he was touring practices and meeting with potential coworkers, he was looking to fit in. He was more comfortable on tours when the individuals appeared to be speaking from personal experience and not from a brochure or preapproved speech.
Geiger also preferred the tours where the focus was more on learning about the practice, and not vice versa. "I liked this as I felt it was not me being interviewed but me interviewing them," he says.
Geiger appreciated the opportunity to speak with everyone in all levels of the practice. "This made the practice tour feel very genuine, as in 'nothing to hide here.'"
Likewise, Muminovic paid special attention to the ancillary staff during her interviews. "I won't be spending all my time with the CEO, even if he or she is a great person," she says. Muminovic also wanted to see whether there was an investment in facility and equipment maintenance.
"A complete tour is very important. It was nice to have contact information for other physicians in the practice to ask questions at a later time," she says.
Additionally, Muminovic appreciated when groups showed an interest in her family and made sure they were involved in the interview process. "Having a community liaison or Realtor to tour the town and schools was a big help in making a decision about moving to a new state," she says.
Geiger admits that location is a huge factor and advises practices that aren't in ideal locations not to shy away from this fact. "Acknowledge this up front and give multiple options and suggestions for the candidate to deal with this," he says.
Medical groups can improve their chances of successfully recruiting physicians by heeding the following advice:
Don't try to hide problems. Transparency and honesty is the best policy. "It is obvious during the interview when questions are avoided or ignored that serious problems exist," says Amy Muminovic, DO. "Physicians make a huge commitment when they accept a position. Hiring a person with false expectations will create mistrust and contention early in the relationship."
Don't call or e-mail constantly. Applicants don't want to be bombarded with e-mails and calls. However, reaching out post-interview to answer follow-up questions is fine, says Muminovic.
Don't seem desperate. "Recruiting physicians is like dating or recruiting a professional athlete as a free agent," explains Tracy Geiger, MD. "You don't want to seem too desperate, which makes you appear flawed, but you want to make them feel as if they are the only person right for the job and you would do anything within reason to have them be a part of your practice."
Don't use rehearsed language, but make sure tour guides are knowledgeable. When tour guides don't know the answers to basic questions, the tour and interview process can seem "plastic" and "pre-fabricated," which is a huge turn-off, says Geiger.
The healthcare industry contributes nearly $30 billion annually to Nashville’s local economy, according to an
economic impact study released yesterday by the Nashville Health Care Council and Middle Tennessee State University's (MTSU) Business and Economic Research Center.
“Healthcare will continue to be a primary strength that Nashville can build upon from an economic development perspective,” says Ralph Schulz, president & CEO of the Nashville Area Chamber of Commerce, at a press conference announcing the study results.
Healthcare is not only largest employer, but the fastest growing as well, says Nashville Mayor Karl Dean. “We want companies to continue to grow and expand healthcare in Nashville.”
That may not be a hard sell, considering 95% of Nashville Health Care Council member CEOs indicated that having a Nashville headquarters is important to their company's positive performance, according to a survey of approximately 150 member companies of the Nashville Health Care Council.
“The results show healthcare is a dynamic growth industry with global outreach,” says Murat Arik, associate director of the Business and Economic Research Center at MTSU.
The study, “The Health Care Industry in the Nashville MSA: Its Scope and Impact on the Regional Economy,” examined the Nashville healthcare industry and its economic impact locally, nationally, and globally. It analyzed core clinical providers, which include hospitals, ambulatory services, and nursing and residential care facilities operated locally; and other related healthcare companies, including healthcare services management, managed care, life sciences, and professional services firms that operate on a local, national, or international basis.
Key findings include:
The Nashville healthcare industry contributes roughly 210,000 jobs to the local economy.
56 healthcare companies have headquarters in Nashville that generate nearly 400,000 jobs and more than $62 billion in revenues worldwide. (Only companies with more than $500,000 in revenue and at least 100 employees were included in this analysis).
There are more than 250 healthcare companies with operations in Nashville, an industry concentration that ranks it above 13 other similar cities including Atlanta, Birmingham, Dallas, Denver, Indianapolis and Louisville, and more than 300 professional service firms such as: accounting, architecture, banking, and legal, providing expertise in the healthcare industry.
One in eight Nashville workers is employed by a healthcare provider.
The Nashville healthcare industry generated $13 billion in personal income for the local economy in 2008.
The average annual wage of the Nashville healthcare industry is $53,000, significantly higher than the average Nashville wage of $39,000.
The healthcare industry is also a great philanthropic resource for the community. The healthcare community in Nashville is building a better region, says Schulz.
Mayor Dean agrees. “The healthcare industry is part of what makes Nashville great and will continue to play a huge role in its future,” he says.
The number of physician-owned medical practices is declining.
In 2005, two-thirds of all medical practices were doctor-owned, but the number is now below 50%, according to the Medical Group Management Association. More physicians are looking to sell their practice in favor of being employed by a larger medical group or hospital. Some are tired of managing the business, whereas others are concerned about the impact of healthcare reform on their practice.
There is an uptick in the number of independent physicians looking to sell their practices, says Carol Carden, principal of business valuation at Pershing Yoakley & Associates, a healthcare consulting firm based in Knoxville, TN. "The way it is different from years past is that last time it was more primary care physicians selling, but now it is more specialists—cardiologists and orthopedists," Carden says. "It is being driven by the Medicare fee schedule because it will cut more and more into their margin."
Whether you are seeking employment or planning to retire, here's advice on getting your practice ready for sale.
Get your books in order
It doesn't matter whether you are selling to a hospital, medical group, or another physician; getting your books in order is one of the first steps physicians should take to prepare their practice for sale.
"Small businesses can put certain expenses through the business that may not be expensed in more corporate settings," says Amy Galloway, director of Ft. Lauderdale, FL-based law firm Tripp Scott, PA. Perhaps a spouse works for the practice on a part-time basis and has a car or cell phone expense on the books. Those types of expenses can impact the net revenue of the business. "One option is to clean up the books by removing expenses that are of a more family and personal nature," Galloway says.
If a physician plans on exiting the business within 18 months, removing those expenses from the books may be the best option so there are no expenses on the books with effects on net revenue that are difficult to explain.
Another option is creating a separate professional association for those expenses, Galloway says. Physicians should discuss with their accountant strategies to ensure that their books reflect as positively as possible how their practice is performing.
Physicians should decrease AR days and make sure their managed care contracts are current. It's important to show the buyer what the practice bills and collects during a 12-month period. "If you have a specialty like neurology, you likely have a very marketable and profitable practice. But if you haven't collected copays or decreased AR days, your books will have a low percentage of billing revenue, and you will get lower bids than what your practice is worth," Galloway says.
Showing what you bill versus what you collect can also help maximize the value of your practice. If the buyer is a corporate provider purchasing plastic surgery practices, for example, it might say your practice won't collect 50% of reimbursement from your managed care contracts. If you have historic data showing you collected 70%, you can command a better price, says Galloway.
Bottom line: Physicians need to determine the difference between their asking price versus asset value and goodwill.
Right-size your practice
Physicians should make sure they have the right number of employees for their workload.
"Because of the complexity and nightmare of billing managed care, many physicians have a lot of people in the office who aren't being fully utilized," says Galloway. Perhaps someone comes in on Tuesdays to handle Medicare billing, or a spouse helps out and is paid in cash. There are factors that can make it difficult to determine personnel costs for a trending 12-month period. Physicians should determine the job description and total benefit package for all of their employees.
"It may not mean downsizing staff, but being able to adequately describe how employees are utilized for the company," Galloway says.
Determine how you want to be compensated
It is important for physicians to determine whether their new compensation—most likely some type of productivity-based model—will be equivalent to what they are earning now, says Carden.
"If it is going to be equivalent, they probably won't get paid much for the practice itself because there won't be profit left over to generate value in the practice that they are selling," she explains.
Some physicians may opt to receive a smaller compensation package so that can get more money up front for the practice, Carden says. Knowing what their compensation will be will help physicians determine whether they want to take a larger payment up front.
If a physician plans to sell to a junior partner, he or she may have to fund that purchase, says Galloway. "The junior partner will pay for their share of the practice over time through collected revenue, so the physician won't get the full purchase price in cash," she says. Under that scenario, the physician may want to remain involved in the practice while he or she is still owed money to make sure the practice is being managed properly, Galloway says.
Know your strengths
Similar to selling a house, physicians want to ensure their practice's strengths are showcased. For example, using physician extenders such as nurse practitioners or physician assistants is a selling feature that practices want to highlight. "If they have ancillaries, they should promote that to who might buy it as additional sources of profit," says Carden, adding that if you don't have physician extenders, it doesn't make sense to add them. Any unique training or role in the community, such as team physician for the local high school, is also worth noting to potential buyers.
"Anything that really differentiates you from peers is what you want to bring to the forefront to make the sale as lucrative as you can," says Carden.
Ascertain the best time to sell
For the past few years, there haven't been as many hospitals buying physician practices as there have been in the past, but now that is trending back up, says Galloway. If a physician does plan to sell to a hospital or a new physician in the community, he or she should be prepared to stay on with the practice for a certain number of years after the sale.
Hospitals are buying the physician as much as the practice, and a new physician in the community may want a nine- to 12-month window to help transition patients, she explains. Physicians should also pay close attention to what is going on with the Medicare fee schedule to help them decide when is the right time to sell, says Carden.
Right now, "all of the things in reform are slanted for primary care," she says. "It is not as time-sensitive for primary care as for specialists. Physicians should do as much research as they can to see what is coming down the road because if the prospects are looking bad, it might be better to sell sooner than later."
When Allison Blazek, MD, left M. D. Anderson Cancer Center to open her private practice in June 2008, she figured EMRs, rather than paper, made the most sense. After talking with vendors and pricing EMRs, however, Blazek began thinking paper records might be the wiser option after all.
"All of them were going to be tens of thousands of dollars, and I would have to close my practice for a week, and for some I would have to pay for the training," she says. "Starting out new, I thought, 'I'm not going to go into debt trying to get an EMR. I'd rather keep my overhead low.'"
Then, Blazek heard about San Francisco—based Practice Fusion, which offers a free Web-based EMR system. The company is funded by advertising so that when a physician uses the EMR, similar to Google's AdSense program, the system recognizes keywords and sends condition-specific ads from insurers, medical equipment suppliers, and pharmaceutical companies to the EMR page.
"Initially, it was extremely bare-boned, but it did what I needed it to do at the time," she says. "There is this fear that it is too good to be true and that something bad will happen. I've been using it for a year-and-a-half and it has only gotten better."
Initially, Blazek was using the system simply to view the patient's history, look up allergy information, and take notes. But she adds that Practice Fusion has been steadily adding features over time.
"When they got scanned documents, it was a huge deal," she says, explaining that she used to have to store lab charts as paper. Now, she can scan labs and store them on Practice Fusion's servers. Practice Fusion has partnered with Quest Diagnostics so labs will automatically drop into the patient record, and Blazek is hopeful that a similar deal with LabCorp will come along soon.
"The last important piece for me was online prescribing, and they came out with that in January," she says.
David Wyatt, MD, who operates a weight loss and bariatric practice with three locations in Atlanta, is also a fan of the Practice Fusion system. "No one is going to argue with the cost," Wyatt says.
Wyatt signed on in 2008 after he determined the hosted solution was secure. He also wanted something that was easy to use and customizable to his specialty. He says he's satisfied with the system thus far, but is looking forward to some of the applications that are still on the way, such as a patient portal and the ability to share medical records with other providers in a manner that is HIPAA-compliant.
Where's the catch?
The price point is the selling feature for free EMRs, such as Practice Fusion's system or NEPSI (National ePrescribing Patient Safety Initiative), the free e-prescribing application from Chicago-based software vendor Allscripts, says Steven E. Waldren, MD, director of the American Academy of Family Physicians' Center for Health IT. It's often a commercial project that is being repurposed.
"Many times they are not open source, so you can't get access to code," Waldren says.
Before physicians sign up, they should read license and privacy agreements closely to determine what services the vendor is providing, says Waldren.
The following are some key topics to ask about:
Meaningful use. Providers need to meet the meaningful use requirements for EMRs as outlined in the HITECH portion of the American Recovery and Reinvestment Act of 2009 to claim their share of the incentive payments. The EMR also needs to be from a certified vendor. Providers should have the vendor put in writing that it will meet these certification and meaningful use requirements, advises Waldren.
System requirements. Physicians should ask what types of hardware or software they will need to use the system. For example, Practice Fusion's system requires only the basics—a computer and scanner. However, Blazek purchased Adobe Acrobat so that her scanned documents could be converted to a PDF format and stored more easily in the system, rather than using JPEGs.
Support. Physicians should determine whether help desk support is provided. Does the vendor offer only basic services? Does it offer training support? Practice Fusion provides training videos online, says Blazek. She can also call or message tech support.
Security. An easy place to start is to ask about regulatory requirements, says Waldren. Does the vendor meet HIPAA privacy regulations? Would it pass the Certification Commission for Health Information Technology's privacy and security standards?
Waldren says physicians should learn about all of the offerings available to them—open source, closed source, and free. "Don't just say, 'I'm only going open or closed source or going to use one of these two companies because that is what the two practices down the road are using.'"
Primer on open-source EMR options
Waldren classifies open-source EMR products in two categories: community and professional. Community products are typically from a small group or practice that created an EMR and decided to offer it as an open-source product. Professional products have a company behind them delivering services. What does that mean for physician practices?
If the community product doesn't have a service component, the physician practice will have to fend for itself in terms of deploying and maintaining the EMR system, Waldren explains. The practice may also be responsible for the certification component under the HITECH Act. In the professional model, the company would likely be responsible for certification and providing services such as installation and training.
The challenges from a product standpoint for physician practices are determining:
Where will support for the application be obtained?
What information technology resources will be needed to manage the installation and keep the network running?
How will the product be certified for meaningful use? Will the vendor certify the product?
Will the product meet requirements from a usability and workflow standpoint?
The benefits from a product standpoint are:
The price point is lower.
Other companies can provide products and services around an open-source product because they have access to the source code; physicians aren't tied to one single company.
If a practice wants to add a feature or function, it doesn't need to wait for the vendor to support it. Instead, it can find a programmer to add that functionality.
It is an understatement to say that many hospitals, health systems, and physicians could use a helping hand when it comes to purchasing, implementing, and becoming meaningful users of certified electronic health record products. One of the biggest hurdles is finding the money to purchase health IT, because providers won't receive their share of the government incentive payments outlined in the American Recovery and Reinvestment Act of 2009 until after the technology is in place, and they are deemed meaningful users of the technology.
But a little known provision in ARRA, known as the Bank-Qualified Rule, may help solve that challenge for some nonprofit healthcare providers. I recently spoke with Randy Waring, managing director at GE Healthcare Financial Services, about how this provision can help organizations purchase health IT.
HealthLeaders Media: What is the Bank Qualified Rule?
Waring: The Bank-Qualified Rule is a small provision of ARRA that was designed to increase the amount of tax-exempt investments in the municipal and nonprofit markets. Banks have always been able to invest in tax-exempt transactions but they were limited to transactions where the issuer of the bonds didn't issue more than $10 million during the calendar year. Those were the old rules, and they have been in effect for decades. What they did in the beginning of last year to stimulate more tax- exempt financing by banks was they expanded that rule. Instead of a $10 million limit for an issuer, they changed it so it is now a $30 million limit at the borrower level.
HLM: How does this impact nonprofit healthcare providers? Waring: When a nonprofit hospital does tax-exempt financing, the bonds are issued through a state- issuing authority on behalf of the hospital. Under the old bank qualifying rules, if the state-issuing authority issued more than $10 million during the calendar year, those bonds were nonbank qualified. Because of that, the vast majority of nonprofit hospital bonds were not bank qualified—well over 90%. Under the new rules, it is bank qualified up to $30 million per borrower, so if the hospital—not state issuing authority—is not issuing more than $30 million per calendar year then it is bank qualified. Hospitals are going to benefit because there are banks that are going to lend them tax-exempt money that otherwise would not have. A lot of hospitals haven't woken up to the fact that this new rule is out there and it is making it more attractive for banks to lend to them.
HLM: What are some of the other benefits of this type of loan?
Waring: These are private placement tax-exempt financings. You don't have an investment banker involved or a credit enhancer like a bond insurer or bank letter of credit, or a rating agency involved. It is just a simple loan that is done between the hospital and the bank, but issued through this conduit agency. It is far simpler than the typical tax-exempt bond transaction that hospitals are familiar with. It is a lot faster; you can get the deal done in 30 to 60 days instead of six months or longer as is common with a public deal. You don't have the high transactions costs and legal expenses that are associated with a public deal, and because these are mostly bank-qualified now, you can get interest rates that are very competitive with what you get in the public market. It is a good alternative for the small hospitals that would not have ready access to the public market.
HLM: Is it a good option for financing health information technology?
Waring: It is perfect for health information technology or equipment purchases, because it doesn't make sense for a small or short-term transaction to incur all of the upfront costs of doing a big public deal. Leasing is a difficult financing option for an EHR because you have so much software and soft costs. If you are looking for ways to finance an EHR project or a revenue cycle system or any kind of IT project and you are in the nonprofit market, private placement tax-exempt financing is a perfect solution.
HLM: What do hospitals need to know about accessing this type of financing?
Waring: Hospitals ought to be talking to banks and other lenders to see if private placement tax-exempt financing is a good alternative to paying in cash or going to the public bond market. They should reach out to banks or other lenders that they work with and just ask them about this—how it works and what kind of interest rate they can get. Right now these rules are only in effect for 2010 so we have just 12 more months, and then, supposedly, the tax rules will roll back to what they were before. There may be a window of opportunity that will close at the end of this year.
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Healthcare transformation is long overdue—especially as it relates to technology, according to a panel of technology executives who spoke at a Nashville Health Care Council luncheon last week about the future and current state of healthcare information technology.
Panelists included Steve Ballmer, Microsoft's CEO; Harry Greenspun, MD, chief medical officer of Plano, TX-based Dell Perot Systems; George Lazenby, CEO of Nashville, TN-based Emdeon; and Glen Tullman, CEO of Chicago-based Allscripts Healthcare Solutions Inc.
Greenspun says healthcare IT is about a decade behind other industries, and he is amazed that healthcare consumers have tolerated it given the fact that you can make dinner reservations online but not necessarily doctor appointments. "On my iPhone I can get a custom-made burrito at the nearest Chipotle," he says. "But if I get hit by a truck, I can't find, with that same iPhone, a qualified orthopedic surgeon who takes my insurance."
Healthcare and education are the two least automated industries in the Unites States, which is interesting because in healthcare—more than in many industries—it is all about getting information at the right time to the right person, says Ballmer. "You look at the health industry and it is all about information—quality, cost, competition—all of those things need information," he says. "But how do you really capture, share, and present the totality of the information across the constituencies? That is hard to do."
The panel agreed that the American Recovery and Reinvestment Act was a necessary catalyst to increase the adoption of electronic health records—especially for small physician offices with fewer than 10 physicians. The adoption rate of EHRs at that level has been limited—hovering around 5% to 10%.
"The problem for healthcare is that it is exacerbated by the percentage of healthcare that is in small business," says Ballmer. "Small business is a tough market for health information technology because it has custom workflows and they want to be served by other small businesses."
The good news is that the stimulus package won't hinder innovation in healthcare IT, says Lazenby. "Once you have the appropriate base of technology, the innovation will happen."
Greenspun agrees, adding that innovation in technology will lead to innovation in care delivery.
"This is not a technology issue," says Tullman. "It is a human behavior issue—getting physicians to change behavior and workflow in these offices."
The panel questioned whether consumers can be adequately engaged in their health through technology. Lazenby wasn't sure how to engage consumers until the healthcare industry is digitized.
Consumers also need to be incentivized to use personal health records, which is not happening yet, says Greenspun.
Increasingly, the consumerization of healthcare will have a major impact on the healthcare system, says Tullman, adding that there are physicians who already have some of these services. "The future is here; it is just not evenly distributed," he says.
When asked what the healthcare industry should be looking for and doing now as it relates to health IT, Lazenby says that organizations should embrace change, but resist the temptation to try and solve all of the problems in healthcare. "Take practical steps—like more efficient process—and integrate that into workflow, so as technology evolves, you have the platform to build upon."
"This is an elephant of a problem to solve," says Tullman. "But this is a problem of leadership—not technology." Healthcare leaders need to come together and force vendors by saying they are not going to buy a system unless it can be connected. "Set standards in the community," he says. "Healthcare is fundamentally local and a cottage industry, so you solve it by small groups saying, 'We are going to get healthcare connected and flowing.'"
Start with the patient, says Ballmer. The only way to galvanize the docs—be they large or small practices—is to give them something that they want. For example, data about a certain population of patients that can help them improve quality of care and reduce costs. "It may not have the shortest payback or be the most rewarded, but will probably be the most transformative thing that you can do in the long run," he says.
Given the advances in technology, Ballmer emphasized that the time for change is now. "I'm optimistic," he says. "The money is coming. The national debate has been engaged. And now is the time where our industry may be able to step up with some enabling factors to make an even bigger difference."
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I think it's fair to say that healthcare executives and physicians would all agree that the sooner hospitals, health systems, and physicians start gathering and reporting on quality indicators, the sooner healthcare quality can be improved. So it's not surprising that quality metrics are central to the meaningful use requirements outlined in the Centers for Medicare & Medicaid Services interim final rule.
What did surprise healthcare leaders, however, was the number of quality measures that is required for 2011. According to the rule, hospitals must report on 35 quality measures to meet the 2011 meaningful use requirements, including metrics on:
Emergency department throughput, such as admission decision time to ED departure time for admitted patients and median time from ED arrival to time of departure from the ED for patients discharged from the ED.
Ischemic stroke, such as the number of patients who arrive within two hours of symptom onset who receive thrombolytic therapy, and the number of ischemic stroke patients with atrial fibrillation who are prescribed anticoagulation therapy at hospital discharge.
Venous thromboembolism prophylaxis, such as the number of patients who receive VTE prophylaxis within 24 hours of arrival or have documentation on why it wasn't given, and the number of patients with confirmed VTE who received anticoagulation overlap therapy.
Acute-myocardial infarction patients, such as the number of patients who are prescribed aspirin or beta blockers at discharge.
Hospital specific 30-day risk-standardized readmission rate following acute myocardial infarction admission, heart failure admission, and pneumonia admission.
The ventilator bundle, such as elevation of head of the bed, daily "sedation interruption" and assessment of readiness to extubate, and peptic ulcer disease and deep vein thrombosis prophylaxis.
The central line bundle, such as hand hygiene, chlorhexidine skin antisepsis, and optimal catherter site selection.
Urinary catheter-associated urinary tract infection for intensive care unit patients, central line catheter-associated blood stream infection rate for ICU and high-risk nursery patients.
Even though the initial reporting will be done through attestation to CMS because the Department of Health and Human Services won't have the capacity to electronically accept data on clinical quality measures from electronic health records for the 2011 payment year, hospitals and physicians must still provide data on the quality measures as a condition of demonstrating meaningful use. HHS plans to have the capacity to receive electronic information on clinical quality measures from EHRs by 2012.
Currently, "we, as an industry, are only tracking—at least in Medicare pay-for-performance programs—about nine of those," says Steve Hanson, executive vice president of system alignment and performance for Texas Health Resources. And while all 35 are important, Hanson says, he hopes that CMS and the Office of National Coordinator will take the opportunity to focus on the "truly critical criteria" for 2011.
Tripling the number of quality measures that Texas Health Resource's reports on in less than a year is going to be difficult, acknowledges Ed Marx, senior vice president and chief information officer. One of the challenges is the maturity of the technology to produce the types of reports required in just a few key strokes, Marx says.
"There are not many clinical applications out there today that are robust enough to produce the types of reports that we are talking about," he says. "So what we are doing is building a clinical business intelligence system that allows us to report on these measures in real time." THR already has an electronic medical record in all but two of its 13 hospitals and boasts an 80% to 90% utilization rate for CPOE, but it's just now starting to build the clinical business intelligence system, says Marx. "And we are ahead of many of our peers."
Physicians are going to be challenged to meet the quality reporting requirements, as well—perhaps more so than hospitals. Eligible professionals have quality measures broken down by specialty. For example, there are 10 quality measures for cardiology, eight for pulmonology, six for oncology, and 29 for primary care.
But many physicians—even those with EMRs—don't capture clinical data in a discrete format, says Chris Macmanus, partner and practice leader in the Healthcare Information Technology practice of Tatum LLC. For example, some physicians groups chose to upload lab reports as an image in their EMR rather than using a version that captures discrete data from lab findings, Macmanus explains. "Is their EMR fully electronic? Absolutely. Does it meet the need for discrete data for meaningful use? Absolutely not," he says, predicting there will be a lot of reinstallations or software upgrades to physician practice EMRs.
Some healthcare executives are also concerned about the focus of the quality measures. Members of the Health IT Policy Committee were critical that CMS didn't include the recommendation that physicians generate progress notes for each patient visit and document the recording of advanced directives for elderly patients, for example.
"We have been tethered to whatever data has been available, and that data typically has been claims and administrative data," said Paul Tang, MD, co-chairman of the committee's meaningful use work group and chief medical information officer of the Palo Alto Medical Foundation, during a committee meeting Jan. 13. "Most of the existing endorsed quality measures are based on that kind of data," he says. "The rationale from CMS was that it wouldn't contribute to care coordination, [but] there certainly is a lot of feeling that it may," he said.
Hanson is concerned that CMS appears to have focused more on the traditional way healthcare is delivered on a per-procedure basis in the requirements. "I'm not saying that we should add more to this, in fact, the reverse, but we need to be thoughtful as we look at a broader approach of care through accountable-care organizations or bundled payments with physicians and between hospitals and rehab and nursing facilities."
The issue of community and public health is one of the stated goals of meaningful use, says Hanson, "but my sense is this early stage is more focused on traditional medicine."
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Every hospital leader that I have spoken with in the past six months or so has been confident that his or her organization is in a position to qualify for meaningful use and capture all of the incentive payments from the HITECH Act. Yet, both hospital and physician organizations have recently expressed concern about providers' abilities to meet the requirements of meaningful use defined by the Centers for Medicare & Medicaid Services and the Office of the National Coordinator. For example:
Hospitals have "serious concerns that the new health information technology rules severely limit hospitals' ability to access federal financing for health information technology that is used to improve patient care," said the American Hospital Association. "Only hospitals that are considered 'meaningful users' of EHRs can receive much needed financial assistance."
The Medical Group Management Association said that the proposed rules are "overly complex and that medical groups will confront significant challenges trying to meet the program requirements."
The College of Healthcare Information Management Executives said "several provisions within the regulations merit closer scrutiny and will pose significant challenges for providers hoping to implement electronic health records." For example, CHIME is concerned the reporting requirements will overly tax providers, because "many of the measures will require organizations to gather information that span both electronic and paper-based systems, such as the percentage of orders entered through CPOE systems."
So how close are hospitals to meeting the meaningful use requirements? About halfway, according to a report by Falls Church, VA-based Computer Sciences Corporation, a provider of technology services in the healthcare sector. CSC surveyed executives at 58 hospitals this past fall about their readiness to capture the HITECH incentives based on 50 indicators in five general categories—the use of a certified product, criteria for meaningful use, standards adoption, quality reporting, and privacy and security. Being halfway there can be viewed as good or scary depending on your point of view, says Erica Drazen, managing partner of the healthcare group at CSC.
"People, in general, and the industry are overly optimistic," she says. "If they haven't already started, it is going to be a challenge to meet the deadlines—even the extended deadlines." The starting points may be more liberal, but the end point hasn't changed. "Either the crunch is at the beginning or end," says Drazen, adding that it can be done. The question is how many facilities can organize themselves to do this successfully the first time, because there won't be enough time for a second chance. Drazen was most surprised that one-third of hospitals hadn't even assessed where they are yet.
The results from the CSC survey on providers' progress towards readiness are:
Use of a certified product – 67%
Current use of capabilities required for meaningful use – 32%
Standards adoption –54%
Quality management and reporting –54%
Privacy and security protection –73%
Other key findings include:
Only one-quarter of hospitals met at least 70% of the readiness indicators.
About two-thirds have assessed where their current systems have gaps that must be filled to achieve meaningful use.
Although 70% have systems with capability for computerized physician order entry, only 8% have CPOE in routine use throughout the hospital.
Less than half the hospitals have a plan in place to migrate applications to ICD-10. Only 44% use the LOINC coding system that is recommended by the ONC standards committee.
While almost all hospitals—89%—report on core quality measures, only about half of the hospitals pulled more than 50% of the reported data directly from an EHR system. In addition, less than one-third of the hospitals tracked quality of care measures during the patient's stay.
Most hospitals—98%—have a policy in place to limit the disclosure of protected health information, only 52% use encryption technologies to render data unreadable or unusable in the case of unauthorized access.
Not surprisingly, some of the biggest challenges for hospitals will be meeting the CPOE requirement, reporting quality data, and managing the problem and medication lists. "It is challenging because it is operational changes to the process," says Drazen.
Because those cultural and workflow changes are often time-consuming to implement, providers should stop waiting and get started now if they plan to capture the incentive payments and be deemed meaningful users of electronic health records. This advice is something that I have been hearing since the announcement of the HITECH Act. But most providers and vendors have been in a holding pattern waiting for the definition of meaningful use. Now it is here, but "the temptation might be to wait until the final, final rule is released," Drazen says.
There are steps that hospitals can take now regardless of the final, final rule, she says. For instance, organizations can start defining order sets, they can assign clinical leaders to work with the IT department, and they can push their vendor to get interim certification. "It has been available since October and very few vendors have done it, but if your vendor isn't going to be certified you won't qualify for meaningful use," she says.
Overall, there have been very few changes to the meaningful use criteria from the HIT Policy Committee's original recommendations, says Drazen. "It is highly unlikely there will be any significant changes, so stop waiting and start moving. At least assess where you are."
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The long-awaited definition of meaningful use is finally here. Just before the New Year, the Centers for Medicare & Medicaid Services and the Office of the National Coordinator released both the definition of "meaningful use" for electronic health records and the standards to improve the efficiency of health information technology.
Hospital and provider group organizations have already offered their criticism of the proposed regulations. Yesterday, my colleague Janice Simmons offered a good evaluation of the American Hospital Association, Medical Group Management Association, and the American Medical Association concerns.
I was curious what individual providers thought of the definition, so I asked physicians, chief information officers, and other industry leaders whether they thought the meaningful use bar was set too high or low, and what they thought was the most significant change to the HIT Policy Committee's recommendations, if any. Many executives are still delving into the 700+ page document, but here are their initial reactions.
The ONC and CMS have set the bar at an appropriate level. While everyone does not agree with everything they are doing, it is very clear that the health IT agenda in the United States will be driven by the ONC agenda. There is considerably more health "reform" in the HITECH legislation than is likely to come out of the current healthcare reform debate going on in Washington. This legislation will likely prove to be the biggest and most transformational quality and safety initiative ever launched in this country. A huge national experiment is about to take place, and I am looking forward to being involved in it!
John L. Haughom, MD Senior vice president, clinical and patient safety
CMS and ONC have admitted they won't be ready to enforce the rules for 2011 and that answered the biggest question I had regarding how will I report and qualify for the first year. Other items that make the first year easier include relaxed quality measure reporting and the requirement to be ready for a health information exchange but not actually exchanging information. The cost calculation is somewhat low. It states that it should cost a hospital $5 million to meet the requirements, which is really low for most hospitals. The five clinical decision support rules were a surprise and need more definition. Overall, I think the document lifts a good deal of fog that blocked organizations from moving forward.
Jack Kowitt Chief Information Officer
Parkland Hospital and Health System
Overall, the criteria are thoughtful and fair. I like that we are not stretching for the stars—100% compliance for [CPOE] for instance—which indicates that the ONC is listening to sites that are live with an EHR and still having problems getting everything working perfectly. Where we might struggle is in creating accurate denominators that include paper or non-EHR processes, because these are notoriously difficult to collect. For example, the denominator for order entry or ePrescribing seems to require that you keep track of all paper orders. This was never done in the past and is not tracked in our EHR. Therefore, it is a new process and we will have to figure out who/how/when this will be done.
Some providers will think the bar is too low. But when you examine the measures, it becomes clear that the low threshold will almost be immediately exceeded by the mere implementation of the functionality. If an organization is going to all the trouble of CPOE, it is hard to envision that they would stop at 10%.
Naturally, the requirements around HIE are the most daunting. I think the ONC is doing the right thing by including them in the requirements, if for no other reason than to continue to put pressure on communities to develop functioning HIEs that will meet the criteria. I don't think HIE would occur naturally otherwise as it is quite laborious and lacks an immediate ROI to make it attractive.
Richard Vaughn, MD Corporate Vice President Clinical Decision Support and Medical Director, Project Beacon
SSM Health Care
St. Louis, MO
We are extremely disappointed that CMS has decided to exclude critical access hospitals from the Medicaid (as opposed to Medicare) portion of the incentives. We are concerned that CAHs still don't have the all the information they need to understand what constitutes an "eligible EHR expense." The objectives have not significantly changed from the HIT Policy Committee's recommendations. The bar has been set much too high for small and rural facilities. The key question for all to consider is how one can set the same bar for providers at early stages of adoption and at advanced stages of adoption. The result of this single-bar strategy is that providers who already have EHRs—and therefore don't need assistance—will get the lion's share of the incentives. Disadvantaged providers at low stages of adoption who especially need the assistance will be much less likely to get help. CMS and ONC have structured the incentive program in a way that will dramatically expand the digital divide between our country's EHR haves and have-nots, large proportions of which are small and rural providers.
Louis Wenzlow Director of Health Information Technology
Rural Wisconsin Health Cooperative
This is the initial analysis of "meaningful use" by the National Rural HIT Coalition's rural hospital user group. This proposed rule builds on concerns we have about how CAHs are rewarded for EHR implementation under ARRA. Although CAHs are significantly behind other general hospitals, their EHR financial incentives are significantly lower than prospective payment system hospitals. CAH incentives require that they purchase rather than lease, meaning CAHs have less flexibility than the other hospitals. In developing their ARRA compliance strategies, CAHs (unlike PPS hospitals) depend on rule makers to articulate exactly what costs are eligible. This delay and resulting uncertainty will prevent many CAHs from reaching meaningful use. CAHs are extremely dependent on the speed with which the certification process takes place, but many applications don't have certification processes in place.
These barriers mean that CAHs must rely on CMS and ONC to issue instructions that are sensitive to the realities of community hospital EHR vendor models, the numerous systems that generally fall outside of the certified EHR vendor offerings, certification organization capabilities, and how all of this impacts CAHs' costs incurred.
Terry J. Hill Executive Director
Rural Health Resource Center
The proposed definition of "meaningful use" will result in the fulfillment of the policy priority of "improving quality, safety, efficiency and reducing health disparities." The proposed definition will also meet the five care goals of the HIT Policy Committee. The objectives in the Stage I criteria of meaningful use are reasonable and appropriate and should not represent a significant challenge for users of Certified EHRs. Southeast Texas Medical Associates is performing all of the measures of Stage I, II and III.
Even though there is a great deal of overlap in national quality measures, the Physician Quality Reporting Initiative and National Quality Forum clinical quality measure sets are too robust for a beginning effort. The extensive quality measure tracking and reporting requirements will result in many excellent groups either not participating, or not succeeding in their participation in the CMS program. A more circumscribed measurement group would be appropriate with gradual increasing of the breath of the requirement.
Caution must be used in the requirement for being able to report patient information electronically between practices, some with different EHRs and some without EHR capability. This interoperability is in development. The rules for participation in the CMS HIT incentive program must not discourage participation, but encourage it.
The promise of EHR and actually of "electronic patient management," is within our reach. The meaningful use requirement is a step in the right direction; it must proceed steadily but not so rapidly as to discourage participation.
James L. Holly, MD CEO
Southeast Texas Medical Associates
The issue of whether CMS is reaching too high really depends on the situation each organization faces. It would have been nice, if the standards addressed the different situations that organizations face rather than a one approach for all. It is also noteworthy that these tight standards are being issued at a time when hospitals face major cutbacks in funding at both the state and federal levels and therefore have little available funds to implement the changes these regulations were intended to achieve. This is particularly true for rural hospitals that will have to decide if they can really take on the risk of taking out loans to pay for system implementations when there is a high risk they will still not achieve "meaningful use".
Marc Gibbs Chief Information Officer
CMS wishes to use the same "meaningful use" definitions for both Medicare and Medicaid. However, each state must create its own administrative program (subject to approval) and can add other "meaningful use" measures. We think these two points will add challenges to reconciling both programs.
Hospitals may participate in both the Medicaid and Medicare programs if they qualify for each. In addition, those hospitals participating in both will not have to meet additional state (Medicaid) meaningful use measures if they meet Medicare's. Physicians, on the other hand, cannot participate in both, and instead would have a onetime option of switching from one program to another. At the very least, these disparities will cause confusion.
CMS did modify some of the objectives recommended by ONC's Policy Committee. Most notably, CMS rejected recording advanced directives. They also rejected the suggestion that providers report quality improvement and public reporting to patient registries.
CMS has chosen a three-stage approach: Stage I (2011-2012) emphasizing "electronically capturing health information in a coded format; using that information to track key clinical conditions and communicating that information for care coordination purposes"; Stage II (2013-2014) encouraging "the use of health IT for continuous quality improvement at the point of care and the exchange of information in the most structured format possible"; Stage III (2015) on "promoting improvements in quality, safety and efficiency, focusing on decision support for national high priority conditions, patient access to self management tools, access to comprehensive patient data and improving population health." Using this staged approach, CMS is proposing a flexible system that allows hospitals and physicians to start adopting over time, where those starting in later years would have to accelerate through the stages to catch up with earlier adopters in order to collect incentives. It's hard to know at this juncture how providers will navigate the many different potential paths to qualifying for incentives or which paths are the most efficient and effective.
Bruce Taffel, MD Chief Medical Officer
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