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Hospital-acquired practices said to offer better care


Physician practices bought by hospitals  become better at implementing care plans for chronically ill patients, says a study  in the American Journal of Managed Care.

“It’s interesting for physicians who are considering selling their practice to know what might change for the better and for patients who may find that their doctor’s office is now owned by a hospital,” lead author Tara Bishop, M.D., of Weil Cornell Medical College, in New York City.

Across the country, hospitals are increasingly acquiring private physician practices. The new study sought to discern how this affects patient care. Researchers focused on the practices’ ability to implement Care Management Processes (CMPs) and use health-information technology.

Dr. Bishop and her group analyzed data  from three major national surveys of physician practices conducted over different  periods.

The study found that hospital-acquired practices increased their use of CMPs, which are a proven method of improving patient outcomes. That’s perhaps because those practices  could now access hospitals’ large data and other resources when implementing new policies. Hospital ownership did not appear to affect practices’ use of electronic medical records technology, however.

Nonprofit hospitals should put IT in the cloud


Dick Escue, chief information officer of Colorado’s Valley View Hospital, says in Hospital Impact that because  health-information technology costs nonprofit hospitals and health systems billions, driving down the credit score of some of them, they should look to the for-profit sector for guidance in curbing costs and getting more reliable service.

“I have observed shocking discrepancies in financial approaches to IT decision-making. Non-profits treat IT as an asset or fixed cost–a ‘one-and-done’ investment which depreciates, and whose initial cost is amortized across the many departments and patients it serves. This is the standard total cost of ownership (TCO) framework used for asset-based investments, and most of the time, it works beautifully.

“The notion of health IT as an asset, however, is misguided. Any tool that requires a complex web of support personnel to extract results is, by definition, central to hospitals’ operating model. A simple TCO analysis can’t forecast all of the operational costs necessary to increase margin under this model. That’s because operating costs are variable, subject to fluctuation over time. In the case of enterprise software, operating costs have an insidious way of inching up, not down. Years after their initial TCO analyses, many non-profits on software find themselves carrying costs far beyond what they predicted.

“By comparison, for-profit health systems tend to favor a cloud-based service model over hosted software, effectively shifting their IT expenses into the variable operating cost category. For-profits’ rules for purchasing technology are simple: increase operating margin through efficiency and reduced overhead. One of the most efficient and most effective ways to get those returns, as well as accurately predict costs, is to buy cloud-based services. This model reflects the full value of an always-on network, continuous free updates, and an army of service workers behind the scenes. Thanks to the cloud’s economies of scale, the total cost to generate results is less than the army of IT workers and support staff powering a traditional software-backed approach. And unlike software, whose operating costs fluctuate unpredictably, cloud-based services are charged as a fixed percentage. ”

“Cloud computing converts fixed costs into variable costs and has proven to be a nimble tool with better returns than even the most pedigreed software.”

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