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Reasons Hospitals Acquire Medical Practices

Posted on January 28, 2013 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

The Charlotte Observer did a great report on the shift to hospital owned medical practices. For those not familiar with the shift, here’s the numbers the article offers:

Last year, 47 percent of U.S. physicians were employed by hospitals – roughly twice the percentage in 2002, according to surveys by the Medical Group Management Association.

One health care recruiting company predicts that hospitals could employ as many as 75 percent of U.S. doctors within two years.

I still think that some of this shift is cyclical, and independent thinking doctors will eventually leave their hospital overlords and be back on their own again. However, considering the financial side of the equation, many doctors might not be able to go back to their own practice even if they want to do so.

Here’s an example from the article that explains one of the reasons that hospitals are acquiring medical practices.

Gary Ziomek can vouch for that. The Waxhaw resident began getting physical therapy in 2011, after undergoing an unsuccessful spinal fusion surgery. He went to a therapist at Carolinas Rehabilitation on the campus of Carolinas Medical Center-Pineville hospital.

Early this year, his bill was $148 for 30 minutes of massage. But starting in May, the charge for a 30-minute massage rose sharply, to $249.30 – even though he got the same therapy from the same therapist in the same building.

Ziomek said an employee told him the higher charge came about because the office, which is owned by Carolinas HealthCare, began billing as a hospital-based setting. He said he was told that patients could go to the Ballantyne office and pay the lower amount.

Ziomek’s Aetna insurance reimburses differently based on where a service is rendered. For an office visit, Ziomek was responsible for a $20 co-pay, no matter if he had met his $250 deductible. For a hospital visit, he pays 10 percent of the bill after paying the $250 deductible.

In this case, Ziomek’s out-of-pocket expense dropped, because he had already met his deductible for the year. But he’s concerned that the overall cost went up, with no change in service or quality.

“Somewhere along the line, they realized, ‘We can charge more to the insurance company even though the patient is getting exactly the same service,’ ” said Ziomek, 70, a retired investment banker. “They could have kept the lower rate, but they chose not to. Why? Because of greed.”

I think the last line about greed is a little bit of sensationalism. In our market, healthcare is driven by revenue and profits. Many hospitals say they’re non-profit, but they certainly act like for profit entities.

What’s surprising to me is that insurance companies are putting up with this shift. I expect the loophole will be reversed again, but that often takes time. Some policy will be put in place to stop hospital owned medical practices from charging at the hospital rate. However, until that happens you can be sure that hospitals will continue their acquisition of medical practices.

AHA Says Meaningful Use Schedule Is Too Ambitious

Posted on May 4, 2012 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or

Wow. The American Hospital Association is stepping into the picture this late in the game to complain that Meaningful Use rules are imposing massive pressure on its members?  The AHA isn’t known for its reticence, after all. But anyway, it appears that this week the trade group has jumped in and started swinging.

AHA’s executive vice president and complainer-in-chief Rick Pollack sent a 68-page letter to the Obama administration this week complaining about the burden of the Meaningful Use program.

Why can’t hospitals force their way through the process to get their bucks (which, after all, can be as much as $11.5m)? Pollack apparently cited  “the high bar set and market factors, such as accelerating costs and limited vendor capacity” in his list of concerns.

He could just have easily cited a bunch of other obstacles we’ve covered here, including a lack of staff available to implement EMR projects, demands placed by the ICD-9 to ICD-10 or maybe even the fact that $11.5 million doesn’t do nearly enough to defray the sticker price on, say, an Epic installation for a mid-sized hospital (Assuming the mid-sized hospital can convince Epic to let them use their EHR software).

Given these factors, I have to agree with the AHA: it doesn’t make a lot of sense to start penalizing hospitals with non-qualifying EMRs by 2015, an eye-blink in time when it comes to planning enterprise software installations and upgrades.

So, what should the administration do?  Certainly, moving deadlines up further would be a sweet gesture, but unless hospitals had five to seven years to carry this thing through, it will still feel like eating glass for many hospitals. And of course, if the Obama administration were to do such a thing, should it offer extra bonuses to the 20 percent of hospitals which have somehow managed to meet MU criteria?  There’s far, far more questions than answers to consider here.

Honestly, I would have expected to hear this schpiel, which I sympathize with greatly, a long time ago.  Maybe it just took this long for a major news organ like Bloomberg Businessweek to understand the issues and pipe up.

An Important Shift, Most Hospitals Now Favor HIEs, Whatever Those Are

Posted on November 14, 2011 I Written By

Katherine Rourke is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she’s served as editor in chief of several healthcare B2B sites.

For quite some time — I’d estimate five years at least — health information exchanges were the dark horse of the health IT world.  A few successful ones emerged, but far more foundered, in many cases because hospitals involved couldn’t or didn’t want to share information. Today, on the other hand, everyone seems pro-HIE. The question is, is everyone even talking about the same thing?

These days, with the big bad government breathing down their neck, hospitals are scurrying to connect with HIEs. According to new data released by healthcare technology research firm CapSite, which surveyed about 340 hospitals on HIE adoption:

  • 74 percent either plan to buy new HIE solutions or already have them in place
  • 32 percent are already
  • 16 percent plan to engage a consulting firm to help move their HIE planning and vendor selection process ahead
Hospitals planning HIE tech investments were most interested in buying MPI/patient and provider indexes, immunization reporting and results reporting/delivery solutions, CapSite’s survey found.Now, these results aren’t incredibly definitive.

As an InformationWeek story on the study wisely points out, CapSite didn’t do much to narrow down its definition of an  HIE before people there did the research.

The thing is, just about any networking technology could be called an HIE if you try hard enough.  For example, here’s Chilmark Research’s definition:

A Health Information Exchange (HIE) is a technology network infrastructure whose primary purpose is to insure the secure, digital exchange of clinical information among all stakeholders that are engaged in the care of a patient to promote collaborative care models that improve the quality and value of care provided.

If that wasn’t vague enough for you, here’s what HIMSS has to say on the subject:

A health information exchange is the electronic movement of health-related information among organizations according to nationally recognized standards.

The real clincher, though, is the breadth of vendors CapSite included in its research. Check out this list:

Accenture, ACS, Allscripts, athenahealth, Bass & Assoc., Carefx, Cerner, Covisint, CPSI, CSC, CTG, dbMotion, Deloitte, Dell, Dr. First, eClinicalWorks, Epic, GE Healthcare, Healthland, HIMformatics, HP, ICA, InterSystems,  KPMG, McKesson, Medicity, Meditech, MedPlus, MEDSEEK, Microsoft, MobileMD, NextGen, Northrop Grumman, OptumInsight (formerly Axolotl), Orion Health, Prognosis, QuadraMed, RelayHealth, SAIC, Siemens 
All that being said, I’m happy to see additional data suggesting that hospitals are making HIE progress. Got a feeling 2012 is going to be a good year — for vendors at least.

HIT Bigshots Tackle Post-Hospital Care Coordination, Miss The Point

Posted on October 13, 2011 I Written By

Katherine Rourke is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she’s served as editor in chief of several healthcare B2B sites.

I’d be a pretty shallow gal, I would, if I didn’t take the problems patients face when transitioning from hospital to another setting seriously.  But I swear I’m not being flip when I say that holding another conference on how HIT can solve the problem is, uh, a bit lame.

The conference in question, which will bring together some bigshots in healthcare policy, politics and health IT, includes speaker spots by Farzad Mostashari, MD, National Coordinator for Health IT, Health Affairs Editor-in-Chief Susan Dentzer and Todd Park, CTO  of HHS. Wow. And that’s just some of the headliners.

The participants will cover some of the critical ways HIT can support seamless transitions from hospitals to a patient’s next location, including standards, interoperability, exchange and Meaningful Use, the event’s press release notes.

OK. Fine. I get it — to coordinate care, EMRs and other HIT systems have to be individually robust and share data fluidly. Providers have to get on board. And it’ll all work if everybody adopts the right technology and plays nicely with their pals.

It’s telling, though, that event leaders aren’t promising much talk on how patients and their families can leverage IT to help make this happen. It isn’t about empowering patients to access their health information, communicate with doctors as supportive team members or even about patient education. It’s all about making sure the machines and software do their job. A brilliantly orchestrated, thoughtfully developed, boundlessly powerful set of machines and software solutions, but technology nonetheless.

So count me as impatient. Until policy types and health IT gurus get their heads out of the enterprise IT, networking and software business, they’re going to talk around the real care coordination issue. And that’s not only a bore, it’s a dangerous waste of time. We’re fighting for people’s lives here.

Hospitals have and arguably have had for some time more than enough firepower to solve their end of the problem. But historically, they’ve done little to involve patients and families in managing their conditions once they’re gone. Discharge summaries are perfunctory at best, particularly given how much info hospitals have at their fingertips, and virtually no education takes place throughout a patient’s visit. Once they leave, it gets far worse. “Out of sight, out of mind” may be a bit too strong but I’m sure you see what I mean.

If they want to be part of the solution, hospitals will need to think about how they can support the patients directly through smart IT use, especially super-smart new mobile options and remote monitoring of chronic or emergent conditions in the home.  Otherwise, patients are likely to remain sick, puzzled and likely to fall between the cracks.