Group practice leaders looking to spend: survey

Group practice leaders responding to the 17th annual Modern Healthcare/Modern Physician Survey of Executive Opinions on Key Information Technology Issues are looking to spend more on healthcare IT in the near term than they are currently spending, but how much more is widely variable.

Of the 344 executives who responded to this year’s survey, 96 indicated they were leaders of medical group practices. Their organizations ranged in size from a couple of solo practices to two large medical groups with more than 1,300 physicians. The average practice size was 88 physicians, but the median size was 16. Average revenue was $41.7 million while median revenue was $11.5 million. The survey was open from Oct. 30, 2006, through Jan. 12.

Most executives (81%) deemed their practices to be operating in highly competitive environments, while 19% of respondents indicated their practices were geographically removed from other competitors.

Budgeting for healthcare IT spending varied greatly. More than half of respondents (54%) indicated they currently are allocating just 2.5% or less of total operating expenses for IT, with the mean range of 2.1% to 2.5% also the most often selected (by 16% of respondents).

But one in five respondents selected operating budget ranges of 4.6% or higher.

More than half of the group leaders (55%) in the survey reported they currently are spending 10% or less of their capital budgets on IT, while 50% indicated they would be spending 10% or less over the next three years.

But a large majority of executives (69%) predicted their spending on IT will increase over the same period, compared with 11% who thought their IT operating expenditures would decrease and 19% who reported that it would be unchanged.

Similarly, 61% of respondents estimated their IT capital expenditures will go up over the next three years, while 13% projected capital spending cuts and 24% selected “no change.”

With all the emphasis by the government and business interests on clinical IT systems, they were not the top “hot button” priority this year, according to our readers. Asked to prioritize their IT needs and make their top three choices from a list of 16 alternatives, 41% of respondents picked practice-management solutions, well ahead of ambulatory clinical solutions and clinical communication infrastructure/communication systems that were each chosen by 31% of the survey respondents.

Other oft-selected IT priorities were Web-based technologies to enable patient access to certain data via the Internet at 27%. At 22% were picture-archiving-and-communication and other imaging systems, along with consolidating all IT systems using common applications.

Michael Nissenbaum, president and chief executive officer of iMedica, a Carrollton, Texas-based vendor of an electronic medical-record/practice-management software suite, says there are several compelling reasons practice leaders are looking at their practice-management systems. Before joining iMedica, Nissenbaum spent five years as the president and CEO of Millbrook Corp., a practice-management systems provider that GE Medical Systems Information Technologies moved to acquire in late 2002.

“At Millbrook, we found that most PM systems have a useful life of five to seven years,” Nissenbaum says. “You had degradation of technology. Vendors didn’t supply upgrades on an ongoing basis. Also, this is a data repository and like any repository, data starts getting corrupted.”

A more pressing concern is the upcoming requirement under the Health Insurance Portability and Accountability Act that by May 23 all electronic transactions include a national provider identifier, or NPI.

If an old practice management system can’t accommodate tagging claims with an NPI, “It’s going to kill you,” Nissenbaum says. Additionally, having a common database for office scheduling, billing and EMR systems will allow staff to flag patients in need of other services.

“You set up a health maintenance rule for a patient in the clinical side of the application, whether it’s an Hb1Ac (blood-sugar test) or PSA (prostate-specific antigen) test, and when that patient calls in, regardless of the complaint, if they’re due for their current hemoglobin or their annual PSA, it pops, and it’s attractive for the practice as well. You have an opportunity to enhance services and increase revenues for the practice.”

Physician-Medical informaticist William Bria, agrees.

“That PM would still be king is not surprising,” says Bria, chief medical information officer at Shriners Hospitals for Children, a system based in Tampa, Fla., and chairman of the Association of Medical Directors of Information Systems. “What these folks may be saying is that they’re still focused on the bottom line and either: 1. A new generation of PM products is of interest; 2. Due to changing reimbursement rules and increasing complexity new systems are needed; or 3. New (Web-based) technologies are more attractive for many reasons and are now finally coming available.

“They just could also be purchasing new systems that include more of the clinical components of an ambulatory EMR,” Bria says.

This story initially appeared in this week’s edition of Modern Physician.



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