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Study: Health IT Costs $32K Per Doctor Each Year

Posted on September 9, 2016 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

A new study by the Medical Group Management Association has concluded that that physician-owned multispecialty practices spent roughly $32,500 on health IT last year for each full-time doctor. This number has climbed dramatically over the past seven years, the group’s research finds.

To conduct the study, the MGMA surveyed more than 3,100 physician practices across the U.S. The expense number they generated includes equipment, staff, maintenance and other related costs, according to a press release issued by the group.

The cost of supporting physicians with IT services has climbed, in part, due to rising IT staffing expenses, which shot up 47% between 2009 and 2015. The current cost per physician for health IT support went up 40% during the same interval. The biggest jump in HIT costs for supporting physicians took place between 2010 and 2011, the period during which the HITECH Act was implemented.

Practices are also seeing lower levels of financial incentives to adopt EHRs as Meaningful Use is phased out. While changes under MACRA/MIPS could benefit practices, they aren’t likely to reward physicians directly for investments in health IT.

As MGMA sees it, this is bad news, particularly given that practices still have to keep investing in such infrastructure: “We remain concerned that far too much of a practice’s IT investment is tied directly to complying with the ever-increasing number of federal requirements, rather than to providing patient care,” the group said in a prepared statement. “Unless we see significant changes in the final rule, practice IT costs will continue to rise without a corresponding improvement in the care delivery process.”

But the MGMA’s own analysis offers at least a glimmer of hope that these investments weren’t in vain. For example, while it argues that growing investments in technologies haven’t resulted in greater administrative efficiencies (or better care) for practices, it also notes that more than 50% of responders to a recent MGMA Stat poll reported that their patients could request or make appointments via their practice’s patient portal.

While there doesn’t seem to be any hard and fast evidence that portals improve patient care across the board, studies have emerged to suggest that portals support better outcomes, in areas such as medication adherence. (A Kaiser Permanente study from a couple of years ago, comparing statin adherence for those who chose online refills as their only method of getting the med with those who didn’t, found that those getting refills online saw nonadherence drop 6%.)

Just as importantly – in my view at least – I frequently hear accounts of individual practices which saw the volume of incoming calls drop dramatically. While that may not correlate directly to better patient care, it can’t hurt when patients are engaged enough to manage the petty details of their care on their own. Also, if the volume of phone requests for administrative support falls enough, a practice may be able to cut back on clerical staff and put the money towards say, a nurse case manager for coordination.

I’m not suggesting that every health IT investment practices have made will turn to fulfill its promise. EHRs, in particular, are difficult to look at as a whole and classify as a success across the board. I am, however, arguing that the MGMA has more reason for optimism than its leaders would publicly admit.

Improving Clinical Workflow Can Boost Health IT Quality

Posted on August 18, 2016 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

At this point, the great majority of providers have made very substantial investments in EMRs and ancillary systems. Now, many are struggling to squeeze the most value out of those investments, and they’re not sure how to attack the problem.

However, according to at least one piece of research, there’s a couple of approaches that are likely to pan out. According to a new survey by the American Society for Quality, most healthcare quality experts believe that improving clinical workflow and supporting patients online can make a big diference.

As ASQ noted, providers are spending massive amounts of case on IT, with the North American healthcare IT market forecast to hit $31.3 by 2017, up from $21.9 billion in 2012. But healthcare organizations are struggling to realize a return on their spending. The study data, however, suggests that providers may be able to make progress by looking at internal issues.

Researchers who conducted the survey, an online poll of about 170 ASQ members, said that 78% of respondents said improving workflow efficiency is the top way for healthcare organizations to improve the quality of their technology implementations. Meanwhile, 71% said that providers can strengthen their health IT use by nurturing strong leaders who champion new HIT initiatives.

Meanwhile, survey participants listed a handful of evolving health IT options which could have the most impact on patient experience and care coordination, including:

  • Incorporation of wearables, remote patient monitoring and caregiver collaboration tools (71%)
  • Leveraging smartphones, tablets and apps (69%)
  • Putting online tools in place that touch every step of patient processes like registration and payment (69%)

Despite their promise, there are a number of hurdles healthcare organizations must get over to implement new processes (such as better workflows) or new technologies. According to ASQ, these include:

  • Physician and staff resistance to change due to concerns about the impact on time and workflow, or unwillingness to learn new skills (70%)
  • High cost of rolling out IT infrastructure and services, and unproven ROI (64%)
  • Concerns that integrating complex new devices could lead to poor interfaces between multiple technologies, or that haphazard rollouts of new devices could cause patient errors (61%)

But if providers can get past these issues, there are several types of health IT that can boost ROI or cut cost, the ASQ respondents said. According to these participants, the following HIT tools can have the biggest impact:

  • Remote patient monitoring can cut down on the need for office visits, while improving patient outcomes (69%)
  • Patient engagement platforms that encourage patients to get more involved in the long-term management of their own health conditions (68%)
  • EMRs/EHRs that eliminate the need to perform some time-consuming tasks (68%)

Perhaps the most interesting part of the survey report outlined specific strategies to strengthen health IT use recommended by respondents, such as:

  • Embedding a quality expert in every department to learn use needs before deciding what IT tools to implement. This gives users a sense of investment in any changes made.
  • Improving available software with easier navigation, better organization of medical record types, more use of FTP servers for convenience, the ability to upload records to requesting facilities and a universal notification system offering updates on medical record status
  • Creating healthcare apps for professional use, such as medication calculators, med reconciliation tools and easy-to-use mobile apps which offer access to clinical pathways

Of course, most readers of this blog already know about these options, and if they’re not currently taking this advice they’re probably thinking about it. Heck, some of this should already be old hat – FTP servers? But it’s still good to be reminded that progress in boosting the value of health IT investments may be with reach. (To get some here-and-now advice on redesigning EMR workflow, check out this excellent piece by Chuck Webster – he gets it!)

Prescription Benefits’ Information Silos Provide Feedstock for RxEOB

Posted on June 7, 2016 I Written By

Andy Oram is an editor at O'Reilly Media, a highly respected book publisher and technology information provider. An employee of the company since 1992, Andy currently specializes in open source, software engineering, and health IT, but his editorial output has ranged from a legal guide covering intellectual property to a graphic novel about teenage hackers. His articles have appeared often on EMR & EHR and other blogs in the health IT space. Andy also writes often for O'Reilly's Radar site ( and other publications on policy issues related to the Internet and on trends affecting technical innovation and its effects on society. Print publications where his work has appeared include The Economist, Communications of the ACM, Copyright World, the Journal of Information Technology & Politics, Vanguardia Dossier, and Internet Law and Business. Conferences where he has presented talks include O'Reilly's Open Source Convention, FISL (Brazil), FOSDEM, and DebConf.

In health care, silos between industries prevent synergies like in the travel industry, where you can order your hotel, flight, rental car, and tourist sights all in one place. Interoperability–the Holy Grail of much health care policy, throughout the Meaningful Use and MACRA eras–is just one sliver of the information hoarding problem. There is much more to integrated care, and prescriptions illustrate the data exchange problems in spades. Pharmacist Robert Oscar recognized the business possibilities inherent in breaking through the walls, and formed RxEOB 15 years ago to address them.

RxEOB helps patients and their physicians make better decisions about medications, taking costs and other interests into account. Sold to health insurance plans and benefits managers, it’s an information management platform and a communication platform, viewing patients, health plans, physicians, pharmacists, and family members as team members.

It’s instructive to look at the various players in the prescription space, what data each gives to RxEOB, and what RxEOB provides to each in return.


These organizations have lots of data that’s useful in the RxEOB ecosystem: costs, formularies, and coverage information. What payers often lack is information such as price, benefit status, and tier for drugs “similar to” one that is being prescribed.

The “similar to” concept is central to the pharmaceutical field, from the decision made by drug companies to pursue research, through FDA approval (they want proof that a new medication is substantially better than ones it is similar to), to physician choices and payer coverage. There may be good reasons to prescribe a medication that costs more than ones to which it is similar: the patient may not be responding to other drugs, or may be suffering from debilitating side effects. Still, everyone should know what the alternatives are.


One of RxEOB’s earliest services was simply to inform doctors about the details of the health care coverage their patients had. This is gradually becoming an industry function, but is still an issue. Nowadays, thanks to electronic health records, most physicians theoretically have access to all the information they need to prescribe thoughtfully. But the information they want may be buried in databases or unstructured documents, jumbled together with irrelevant details. RxEOB can extract and combine information on available drugs, formularies, authorization requirements, coverage information, and details such as patient drug histories to help the doctor make a quick, accurate decision.


These can use RxEOB’s information on the benefits and cost coverage offered by health insurance for the patients they serve.

Benefits managers

These staff know a lot about patients’ benefits, which they provide to RxEOB. In return, RxEOB can help them set up portals and use text messaging or mobile apps to communicate to patients.


Finally we come to the much-abused patients, who have the greatest stake in the whole system and are the least informed. The consumer would like to know everything that the rest of the system knows about pricing, alternatives, and coverage. And the consumer wants to know more: why they should take the drug in the first place, for instance, how to deal with side effects. RxEOB provides communication channels between the patient and all the other players. Thus, the company contributes to medication adherence.

RxEOB is a member of the National Council of Prescription Drug Programs (NCPDP) which works on standards for such things as prior authorizations and communications. Thus, while carving out a successful niche in a dysfunctional industry, it is helping to move the industry to a better place in data sharing.

Keep It Simple, Stupid!

Posted on February 28, 2014 I Written By

Kyle is CoFounder and CEO of Pristine, a VC backed company based in Austin, TX that builds software for Google Glass for healthcare, life sciences, and industrial environments. Pristine has over 30 healthcare customers. Kyle blogs regularly about business, entrepreneurship, technology, and healthcare at

There are an enormous number of startups trying to solve the medication adherence problem. Broadly speaking, these startups are trying to solve the problem through three avenues:

1) Hardware, i.e. smart pill bottles

2) Semi-intelligent software driven reminders

3) Patient education

The most effective solutions are likely to incorporate all three.

The hardware space has been the most interesting simply because of the variety of solutions cropping up. AdhereTech and CleverCap have developed unique pill bottles that control and monitor dispensing via proprietary smart pill bottles. They also incorporate software for notifications. Unfortunately, all smart pill bottle makers are bounded by FDA regulations because they physically control medications through a combination of hardware and software. FDA regulations will slow time rollout of these solutions to market and create enormous new expense.

I recently learned about PillPack, a startup that just raised $4M. They compete asymmetrically in the medication adherence by not making any hardware at all!

The problem with the pill bottle is that there are dozens of pills in a single container. Measuring and controlling output and consumption is intrinsically a difficult problem. PillPack solves these problems by simply averting the issue entirely. PillPack pre-packs pills by dose. This is particularly valuable because they pre-pack multiple kinds of medications that need to be taken at the same time.

PillPack doesn’t yet have any intelligent software that monitors when medications are taken. But with granular packaging, sensing and controlling the medications becomes dramatically easier than ever before. I suspect this will the marquee feature of PillPack 2.0. Once they add the ability to detect when a pack is opened, they can begin adding intelligent software alerts and reminders to patients and their families.

PillPack has a far more lucrative distribution strategy than companies who have to produce and distribute hardware. PillPack can scale their customer base incredibly quickly through B2C marketing. B2C marketing isn’t easy; Pillpack faces a significant challenge in terms of patient and provider education, but it’s one that’s definitely addressable. If PillPack’s service is as good as I think it is, they should develop incredibly happy customers, which will lead to recurring revenues and strong referrals.

The moment I saw Pillpack, I immediately recognized it as one of those “duh” business. We’re going to look back in 10 years and wonder why this wasn’t always around. Their solution solves so many of the pain points around taking medications on time and is coupled with a lucrative business model that feeds off of recurring revenues from long term customers.

The genius of their business is that they are tackling the medication adherence problem from a unique angle: packaging and distribution. They’ve bundled that solution into a simple and elegant package (pun intended) that helps patients avoid the pain of the modern US healthcare system: going to the pharmacy, fighting with the pharmacist, and manually tracking when to take how much of each medication.

Full disclosure: I have no relationship(s) with PillPack.