by Sarah D. Scalet

The Private Practice Value Proposition

Aug 01, 20033 mins
Business IT Alignment

If you think getting hospital physicians to use a computerized physician order-entry (CPOE) system is a tough sell, you’re right. But convincing physicians to pay for a CPOE in their own practices is even harder. Yet that’s precisely where the greatest benefits will be found.

The Center for Information Technology Leadership (CITL), a research organization founded by Partners HealthCare System in Boston, estimates that advanced CPOE in outpatient settings could save the U.S. health-care system $44 billion a year. The systems save money not only by preventing errors but also by suggesting less expensive drugs and avoiding unnecessary or duplicate lab tests. The problem is, these savings don’t necessarily go to doctors, despite the fact that they’re the ones being asked to foot the bill for the systems.

With a big enough practice, economies of scale do kick in. CITL estimates that for a practice with 50 providers, the net savings on installing these systems would be $104,000 per provider over five years. But 75 percent of U.S. physicians practice in a group with five or fewer doctors, where the numbers are not so enticing. Dr. Blackford Middleton, CITL’s chairman, says that an advanced CPOE costs each physician in a five-person practice $122,000 for the first five years—or about $25,000 per doctor per year.

Partners is trying to improve the value proposition by changing its managed care contracts to a pay-for-performance model. In this kind of system, physicians’ pay is based on not just what they do but on how well they do it. A physician might get extra credit for prescribing a generic drug rather than a brand name one, or for having a diabetic pass certain checks—all things that can be done and then proven much more easily digitally than with paper-based systems.

Employers are also beginning to offer similar incentives. Bridges to Excellence, which involves corporate heavyweights like Ford, GE and Procter & Gamble, is offering qualifying physicians a $55 bonus per patient for improved care.

John Glaser, vice president and CIO of Partners HealthCare and a member of CITL’s executive committee, hopes programs like these will help make the inconvenience and up-front costs of CPOE worth the physician’s while. “People paint doctors as technophobes,” he says. “That’s just not true. But they do want to know the value. You have to have a pretty good case for why you’re going to bother with this.”