Getting physician group practices, particularly smaller ones, to invest in information technology has been a tough sell, by all accounts. You cant give IT away, although hospitals and the federal government are trying. The first with the legal blessing of the Internal Revenue Service, and the second through several recently announced grant programs. So what will make group practices and other physician-owned healthcare operations finally give it up? Perhaps four group practices in Michigan have found the answer: Money.
As frequent Modern Physician contributor Jay Greene reports in this issues Top Story, the four practices banded together a few years ago to create their own health information exchange. They did so in response to the growing pay-for-performance reimbursement movement, which rewards providers with bonuses for meeting certain performance targets and penalizes others that dont.
The practices figured out that in order to improve their performance, they needed to track their performance. Thats where IT came in, as they hired an outside vendor to custom-build an electronic clinical data collection system for the four groups. Then they began using the system to provide the performance data to the big health insurer in town, Blue Cross and Blue Shield of Michigan, as part of the Blues plans Physician Group Incentive Program.
According to Greene, the annual operating expense of the health information exchange is $140,000. Since June 2006, one of the participating practices alone has collected $1.2 million in pay-for-performance bonuses from the Michigan Blues. Physicians dont need an MBA to figure that one out.
Performance-based reimbursement is here to stay. The best way for group practices to match that financial challenge is to invest in IT. It will allow them to track and improve performance, and then send that information to payers in exchange for fatter checks. The practices that dont will be left behind financially, putting themselves into an even worse position to adopt healthcare IT. You snooze, you lose.