This in turn is leading to a flurry of innovation downstream at the practice management level, experts say, as vendors look for ways to entice practices to ditch their old billing systems and install their larger software suites.
The sudden flurry of innovation is a result of the increased demand from group practices for clinical technology, experts say. Many groups feel the writing is on the wall. Federal and state governments, patients, hospitals and payers are all prodding them to increase automation, using carrots-higher reimbursements linked to I.T. usage-as well as sticks-the impending threat of government mandates.
So for those and other reasons, group practices are in a buying mode, says David Kibbe, M.D., director at the Center for Health Information Technology at the American Academy of Family Physicians, Leawood, Kan.
Practice management vendors are telling the AAFP that their sales on average are running 15% higher than last year, Kibbe says. In a related trend, about 25% of the academy's physician members say they are using an electronic records system, compared with 15% in 2004.
"The number of inquiries we get about how to purchase technology has nearly quadrupled in the past year, and the vast majority of those inquiries are about how to buy an integrated practice management/electronic records system," he says. "There are a lot of instances when a practice is looking for just an electronic records system, but then changes its mind and buys a practice management system as well. There's no doubt that sales are brisk."
Electronic records are driving the growth in the market for practice management systems. But practice management technology has not necessarily become an afterthought. Vendors are adding a variety of new features to the software to automate workflow, increase reporting capabilities and speed up the billing process.
"Group practices that are starting to use electronic records systems are seeing the value of removing the `friction' of information flow, and they're asking why there's still so much friction on the billing side," Kibbe says. "And that's a very good question to ask."
Setting the stage
The increased functionality of practice management systems is in a sense a byproduct of the Health Insurance Portability and Accountability Act, says Tony Arias, president and founder of NCG Medical Systems Inc., Altamonte Springs, Fla.
The oft-maligned HIPAA transaction and code sets rule required many practice management vendors to do major overhauls of their software to handle the new data formats, Arias says. Some-like NCG Medical-used the opportunity of rewrite their applications using more advanced programming languages and software platforms, such as the .Net platform from Redmond, Wash.-based Microsoft Corp.
"Upgraded platforms provide a lot more flexibility and make it easier to add new features on demand as well as embed more functionality into the core technology," Arias says. "That includes making the core technology more Internet and wireless `aware.' Extending the practice management online or to a wireless network was possible with older platforms, but it wasn't easy. These redesigned systems have those connectivity capabilities built in."
At Arizona Oncology Services, the increased flexibility has made previously onerous tasks relatively mundane, says Tim McKeough, COO at the 21-physician, 12-site practice in Phoenix. Arizona Oncology in 2003 implemented a combined practice management/electronic records systems from NextGen Healthcare Information Systems Inc., Horsham, Pa.
One area where improvements are particularly striking is reporting capabilities, McKeough says. Running anything other than "canned" reports used to require McKeough to hire a programmer or rely on the vendor to develop a programming script to pull together data in the practice management system. The flexibility of the new system's architecture enables him and his staff to design their own reports and extract the information in hours, instead of waiting days for a third party to do it.
"Enhanced reporting functions are extremely important, especially when you have added the electronic records component and have a database of clinical data you can analyze," he says. "I've seen a lot of vendors over the past three years focus on improving how their software filters data and enables practices to add unique data elements to reports. They've started to understand how important it is for those running the business operations. Those capabilities-and the level of commitment by vendors-weren't there in past generations of software."
The improved connectivity of the group's practice management software also has made it easier to maintain the software, McKeough adds. Software upgrades and maintenance tasks now can be done via a secure Internet connection instead of having the practice's staff download the software from CD-ROMs. In addition, the upgrades can be scheduled to automatically take place at night or during the weekend.
"Upgrades used to require us to take the practice management system down for half a day, and we had to pay staff overtime to come in to do it," he says. "The software architecture makes it easy and fast to upgrade without having to shut down our clinical operations. The software improvements pay off in a lot of ways."
Custom job
The higher levels of service that group practices are getting is in large part a byproduct of the market's increased competition, says Vinson Hudson, president at Jewson Enterprises, an Austin, Texas-based health care research and consulting firm.
Perhaps the best example of improved customer service is systems migration, he says. Many practices that want to implement an electronic records systems are loathe to tear out their old practice management systems because of the difficulty and expense of moving their legacy data. But vendors of integrated practice management/electronic records packages are starting to offer to do migrations for little or no cost, Hudson says.
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