According to the recently published CMS Accountable Care Organization (ACO) rules, an ACO needs to care for at least 5000 Medicare beneficiaries. Theoretically, two primary care physicians and a nurse, practicing in a garage, or cottage, in Boonville Missouri (yes, there is such a place), seeing nothing but Medicare folks, could become an ACO. Of course, they would have to set up a business entity with a board of directors, hire a couple of lawyers, several accountants and contract with a hospital or two and a score of specialists, and be ready to accept financial risk for their patients in a couple of years; all this on top of seeing twenty to thirty elderly and complex patients every single day. Nope. Not going to happen.
ACOs are for the big boys, hospitals and/or extra-large multi-specialty groups, to set up, manage and perhaps eventually benefit from. Big systems, as we all know, enjoy economies of scale, are better able to manage and coordinate care, and are therefore uniquely equipped to solve our health care crisis by providing better care at lower costs, and ACOs are just the vehicle by which these systems will be rewarded for all that good work. If you care for people in a small primary care practice, you could bite the bullet and sell out to a large system, or you could retire if you are one of those last standing dinosaurs, or you could become a concierge practice, or you could sit still and watch your practice dwindle and die, or you could buy an EHR, which is the last best hope to keep primary care independent.
Science, the type of science that employs mathematical hypotheses, theorems, proofs and equations, is timidly asserting that the emperor is in need of some serious clothing. A 2009 paper published in a non-medical, non-health care venue, “examines the staffing, division of labor, and resulting profitability of primary care physician practices”. The authors who are researchers from the University of Rochester and Vanderbilt University conclude that “many physicians are gaining little financial benefit from delegating work to support staff. This suggests that small practices with few staff may be viable alternatives to traditional practice designs.” Although I did not check the math, which is extensive, I would have expected that such controversial conclusion would make headline news in health care policy forums for at least two or three days. It did not.
From John Hopkins and the MGMA, we have a 2010 manuscript titled “Size Matters: The Diversity of Physician Practice Production Functions”, also complete with mathematical analysis, which reaches several interesting conclusions. First, it seems that “multispecialty practices gain by size through the creation of an internal referral network among their physicians, and through the capture of ancillary services and control over equipment and facilities”, which identifies one of the reasons why health care costs are steadily increasing. On the other hand, for primary care practices who “have few opportunities to generate production (and revenue) beyond direct patient care and cognitive services”, it seems that “organizational complexities of larger size (and the attendant perception of loss of control by each physician as the practice grows) will rapidly overcome any limited production advantages”. The authors offer two hypotheses for the observation that “[t]he median size of actual physician practices is considerably smaller than expected by estimated production efficiencies”: one is that in addition to maximizing income, physicians may have “non-profit-related goals such as professional autonomy and service to patients”, and the second is that “practice size may not be rewarded in the market”, therefore “health care reform proposals that expect that physician practices must become larger and more integrated will need to identify or create incentives for practices to expand (through internal growth or merger)”. It seems that ACOs have adopted the second hypothesis and rewards are forthcoming.
As early as 2003, researchers in the UK have warned the NHS that quality of chronic disease management in primary care (ischemic heart disease, in this case) is not necessarily associated with practice size. “Although recent developments in the NHS have cast doubt on the future of smaller practices, both patients and the doctors seem happy with smaller practices. Smaller practices are seen as more accessible and achieve higher levels of patient satisfaction. The NHS should reconsider how it can improve the quality of care provided by general practices, without relying on the presumed benefits of consolidating them into larger units”. On the other hand, in the US, acute myocardial infarction seems to be significantly more dangerous to patients of solo practitioners, as reported by a 2007 study published in Health Affairs. The same study notes that “[patients] of solo physicians appear to be less healthy in many of the measures. They also were more likely to have physicians that were female (except those of the largest practices), over age fifty-five, in internal medicine, and with non-U.S. medical training”. I for one, have no idea how to interpret this statement or its implications on the study results. To be sure, other studies, such as “The Relationship between Practice Size and Quality of Care in Medicaid” from the Center for Health Care Strategies, have found that small practice size may have ill effects on some quality measures, less on others and strangely improve access to care for some populations.
Small practices usually score very low on measures that are believed to be indicative of ability to provide better care, such as various preventive care screenings, consistent patient reminders, disease management testing and last, but not least, availability of Health Information Technology (HIT) to facilitate all of the above. It may be that documentation is lacking and it may be that small practices just don’t measure very well. As Dr. Lawrence Casalino told amednews.com in 2007, “[t]here is no question about whether large practices that can invest in it and hire staff to make sure they score well are likely to have higher Pap smear rates than people in small practices. But when you get to things that are perhaps harder to measure, like diagnostic skill, then we don’t really know anything about how group size might affect that”. By 2008, Dr. Casalino seems to have reached a different conclusion. A JAMA article he coauthored, and which sets forth the blueprint for the recent CMS ACO rules, states: “At the heart of the challenge is transforming a 19th-century craft-oriented delivery system to provide 21st-century biomedical science and technology. Most physicians still practice alone, in partnerships, or in small groups. Small practices generally have less capacity to implement electronic medical records, less frequently use teams to care for patients with chronic illness, and are less able to provide statistically reliable and valid data on quality and efficiency measures. A more solid foundation of physician organizations is needed to avoid having the system crumble under the increased weight of greater demand for care and technological advances.” By 2010, in a Roundtable discussion, Dr. Casalino seemed again, less certain, “I don’t think that accountable care organizations will succeed if they don’t make life better for patients and also for physicians. They just won’t. I don’t think you can have a major delivery system reform in this country with physicians actively opposed to it. And I think we found that out in the ‘90s.” and he even acknowledged that small practices may have some merit after all, “So there could be these virtual networks. And the concept is, physicians who want to be in small practices and patients who like to go see physicians in small practices — and there are real distinct advantages, I believe, to that setting for both the patients and physicians — would have the option to remains so.”
Bottom line is that when people are being intellectually honest, they have to admit that practice size is just one of a multitude of factors influencing quality and cost of care, and probably not even a very important factor. However, there are three major roadblocks to small practices being perceived as a viable option for the 21st century: lack of health IT, ineffective collaboration with other entities and the inability to measure performance due to small panel size. The beauty here is that removal of the health IT roadblock will automatically remove the other two, because when using computers, collaboration does not require physical proximity and performing analytics on aggregated data is a trivial task. Since the legendary economies of scale supposedly available in large practices have never been calculated and shown to actually exist, and since the advances in Internet-based training and support tools are driving costs of HIT acquisition and deployment down, particularly for small practices who don’t need many of the enterprise bells and whistles in top-shelf EHRs, the 21st century medical practice is within the reach of any solo practitioner.
So if you are an independent primary care doc in small private practice, and would like to stay that way, the best thing you can do right now is to position your practice to take advantage of things to come, or at least ensure that you are not losing ground while you are waiting to see which way the wind blows, and this unequivocally translates into getting an EHR (a cheap one will do), getting connected to the world, exchanging whatever clinical information you can, getting those clinical decision support rules running and, most important, learning to score well on quality measures.
I know this advice may seem unpalatable to many and I know that EHR may seem just another insult to add to the improper reimbursement injury, but what worked well in the past is not likely to work as well in the future. An EHR may not be enough to preserve some semblance of independent primary care, but it is truly the last best hope, and hope is all it is.
Margalit Gur-Arie was COO at GenesysMD (Purkinje), an HIT company focusing on web based EHR/PMS and billing services for physicians. Prior to GenesysMD, Margalit was Director of Product Management at Essence/Purkinje and HIT Consultant for SSM Healthcare, a large non-profit hospital organization. She shares her thoughts about HIT topics and issues at her blog, On Healthcare Technology.