PPMs were all the rage in the 1990s. But the PPM business model proved flawed, and the industry is gone save for a few single-specialty management companies.
Stepping in to fill the void have been hundreds of practice management software vendors.
All of these vendors are "trying to convince physician practices that they have the best thing since sliced bread," says healthcare technology watcher Vinson Hudson. The sheer volume of choices is enough to drive physician executives batty--as if they weren't already apprehensive following the PPM meltdown.
"(Physicians) are more savvy now that they've been burned by people who said they had management skills," says Hudson, president of Menlo Park, Calif.-based Jewson Enterprises, publisher of The POMIS Report, a market survey of physician office management and medical information systems.
Fortunately for medical practices, competition has eliminated some of the weaker players.
Hudson counted 1,134 practice management software vendors nationwide at the end of 2000, down from 1,443 a year earlier. That total fell below 1,000 by midyear as the marketplace continued its shakeout. Impending HIPAA regulations could thin the ranks further, he says.
Besides looming vendor attrition, physician executives also need to be mindful of integrating their older electronic practice management systems with newer electronic medical records and claims processing systems. Hudson says most practice management software vendors don't sell EMRs, and even the ones that do might not offer proper integration. To him, a system is not integrated unless all components and functions draw from a single data repository.
Joseph Jachinowski is president and CEO of IMPAC Medical Systems, an information technology firm in Mountain View, Calif., that specializes in oncology.
Jachinowski says practice management software customers also want EMR functionality.
"The combination of practice management and EMR is really driving business right now," Jachinowski says, and he expects the trend to continue. "I think the pure-play practice management companies are really at a competitive disadvantage right now. I think physicians are looking to the easy entree into EMRs."
Having EMR capabilities is going to become hugely important because of HIPAA. Rules governing healthcare transactions are set to take effect in October 2002, while HIPAA privacy standards will become enforceable the following spring. HHS officials have not reported final HIPAA security standards, but when they do there will be a two-year window to comply with them.
Regardless of what the final security regulations say, practice management is about to change dramatically. With HIPAA, the government is prompting medical practices to automate and, with its criminal penalty provisions, is raising the stakes when it comes to protecting clinical data.
Charles Neimeth, manager of marketing communications for the enterprise solutions division of Burlington, Vt.-based IDX Systems, says that practice management to date has been limited to financial and administrative processes and, at least in nonhospital settings, has ignored clinical aspects of healthcare.
"To be successful, you need to have all three," Neimeth says. "Financial, administrative and clinical all need to be tied together."
Some IT professionals compare HIPAA compliance efforts to the uncertainty of the Year 2000 bug. "With HIPAA, we will see the same sort of rush and the same sort of issues as with Y2K," cautions Rich Goldberg, vice president of marketing and business development for Medic Computer Systems of Raleigh, N.C.
Says Hudson, "By 2002, you're going to have a lot of physician managers out there realizing they have to do something about HIPAA."
And vendors are going to have to be ready.
"If someone really doesn't have a HIPAA-compliant solution, the other company is going to win out. Most doctors don't give a damn about technology. They want someone to walk in the door and offer them solutions," Hudson says.
Goldberg suggests that the problem is compounded by the incomplete HIPAA security regulations. "Nobody can say today that their system is HIPAA-compliant," he says. "Anybody that says that is actually stretching the truth or even lying."
He says vendors likely will update only the more recent versions of their software, forcing many practices to buy both new hardware and software to be HIPAA-compliant. According to Neimeth, a lot the upgrading can and should happen right now.
"The security and privacy issues can be dealt with through fixes or patches to existing systems," he says. "I think transactions is the big piece. You can't operate your business without claims. No claims means no revenue."