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Death of the Solo Practice

April 30, 2009
by aguerra
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HITECH has swept the small physician practice into the dustbin of history

Most scientists believe the dinosaurs were killed by a meteor that hit the Earth, spewing a cloud of ash that blotted out the sun for years. While the dinosaurs perished, smaller, more adaptable microbes and tiny mammals survived, giving rise to the diverse ecosystem we see around us. That meteor had been on its trajectory for a long time, and depending on how Zen you want to get, it had been on its way forever.

For many small, independent physician practices, HITECH is an extinction event. They just don't know it yet.

Dozens of conversations with industry insiders have changed my thinking around the problem of independent physician CPOE adoption and documentation (in the acute setting) and EMR adoption (in the ambulatory setting). “You can't force them to use it,” I used to say. “They are the revenue generators, they bring in the money.”

But HITECH has changed those dynamics. And unless something is drastically changed in the regulations, physicians will lose their “I'll-just-admit-my-patients-to-your-competitor” card, which has traditionally made CEO/CFO-types go wobbly.

With nowhere to go and scribble orders into frequently misplaced three-ring binders, independent docs will have to play ball. And once they play ball in the hospital, it will only be a short time before HITECH sticks and carrots induce them to stop at Sam's Club on the way home for Iron Man and an EMR.

The only model, however, which seems to make sense from a technology point of view is one which has the ambulatory EMR/PM software hosted by someone else, somewhere else, ideally at the hospital where the practice sends most of its patients. But what if the local hospital, and I've talked to CIOs who work at such facilities, can't find a business reason for providing those services? What's a doc to do?

If physicians can't sign up for an ASP/SaaS EMR with a low monthly subscription fee that offers them access to practice and hospital-created data, while simultaneously safeguarding their financials from the prying eyes of hospital administration, and offers them easy import/export portability should they want to switch EMRs, or port their data (in the same EMR) to another hospital's servers, the chances of significant adoption are low.

To understand what can be done to foster physician adoption, we must first understand these physicians. Fiercely independent, and to a lesser extent, entrepreneurial, these docs do not like being told what to do. They are phenomenally educated and know how much they know. They have tempers and egos and they are brilliant and save lives. They have terrible manners and at times a seeming lack of compassion, but when they wheel your loved one into the OR, none of that matters. These doctors are largely not interested in being slowed down, making less money or sitting on the phone listening to an EMR vendor help-desk's Muzak while a waiting room full of patients transitions from simmer to boil.

What these physicians need is a technology infrastructure to handle what the next century will demand of them. And what HITECH will require, they cannot afford, install or maintain in their small practices without third-party hosting and maintenance. One person cannot start and run a factory because the infrastructure required to do so is beyond the revenue generating ability of that person to sustain. Companies run factories and, soon, companies will be the only entities running physician practices. We see this today, when physicians join into single or multi-specialty practices of 10, 50 or 100 doctors.

We will see more and more of this - more doctors banding together, more hospitals hiring their physicians instead of credentialing community docs, and more practices buying hospitals. The future of healthcare, you see, is all about understating the implications of the new infrastructure required to sustain it, required by law. HITECH, and the infrastructure it mandates, constitutes an extinction event. At least we have the chance to see it coming.



Well done Anthony. We are on the same page. I would like to add another avenue of survival: The HIE. If a community has more than one hospital that doctors like to use a HIE can provide an EMR or EMR lite thru an ASP model. In any case, each physician for himself/herself is too painful to imagine.

Very nice job of connecting the dots. By my read, you and Suresh are are not in disagreement, as you point out in "some deaths just take longer." Not only do some brick and mortar book stores co-exist with Amazon, there are new businesses. Ma and Pa 'brick and mortar' bookstores have evolved. Some are part of Amazon's extended market place. Some have added fancy coffee and other services to their real world store fronts. They're not dead. But they don't resemble their former selves!

As I've previously remarked, I think Erica Drazen's three-tier delivery model captures an important reality. One size does not fit all in healthcare.  Not for patients or providers.

Solo/Small-Group practice also fills needs driven by geography. (Sure, I like the promise of telemedicine where location is less important.)

I made reference to Jim Walker's video at Johns Hopkins Medical Informatics Grand Rounds last month. In it, he described how patients being served by independent physicians and Geisinger are getting higher quality of care, as a result of an HIE that includes care mgmt (alerts and reminders, with more unified communications). So, to your point, and those of Suresh and Jim, look for care delivery models to evolve in interesting ways.

The too-small-for-a-factory model is correct. The evolution of the supply chain, illustrated by how Dell builds computers (see Thomas Friedman, The World is Flat), is pushing in the opposite direction. Dell doesn't design, build and deliver their computers. They outsource, in-source, workflow-enable, and flatten everything. They did put one face on the process for customers.

And, just for critical balance, Anthony, physician practice evolved as it did to meet a real constraint. The self-interest (appropriate or otherwise) of large companies is often poorly aligned with individual care. Most of us would be skeptical if any large organization said "I understand your needs, and, no one on the planet can help you. Sorry, Good bye." Physician care delivery was structured as Associations rather than Bureaucracies to address that structural problem. Here's a very succinct treatment:

So, while we're in violent agreement that the business model and the changing requirements of the business of care delivery are a disruptive force, the structure of the post-dinosaur era is yet to be written. The same is true for the technology requirements for this new era. And the same is true for how we collectively want to evolve the professional definitions of care providers, including doctors, nurses, pharmacists and other clinicians.

Thank you. I agree with Suresh; You did us all a great service in pointing out the gravity of what's going on and the implications. I hope I've been faithful to the spirit of your post.

BTW - CAPTCHA Validation is driving me and many others mad.

Thank you gentlemen.

Suresh, you mention that the disruption of the Internet in the late '90 proves that everyone will adapt. I respectfully disagree. I can take my own industry as an example. Publishing companies and magazines that do no embrace online from a content point of view, and then monetize that traffic, are dying all around us. These companies are dying because their old print-centric revenue-based infrastructure cannot support the realities of a lighter-weight online revenue stream. Some deaths just take longer than others.

Jim, your idea of a third-party HIE, independent of any hospital or physician practice, is a good one, but a sustainable revenue model and answers to privacy questions still elude the industry.

Very insightful piece. Quite simply one of the more original ideas, I've read in a long time.

I will have to think about this far more, before I could offer an equally thoughtful response.

I agree with you that HITECH is a market disruptive event. The traditional rules will not apply. Market players, small practices will have to adapt.

I'm not sure that I agree with your likely adaptation: death. At first blush, it seems to me that you sound like e___ vendors in 1999 who proclaimed that brick and mortar companies would die at the hands of the more innovative internet companies because they would not evolve.

What that disruption taught us is that everyone will adapt, some slower than others. Some new winners emerged, and many lost.

What I remember about that time was that the technology was not very good (or mature). Most companies did not know what to do with the technology (meaningful use). Most companies who spent money early had very little ROI.

What seemed to work was waiting the market out and leveraging existing technology.