Practice Rounds: Physician-Owned Practices' Tech Costs Rise

August 12, 2016

New research from the MGMA indicates that physician-owned multispecialty practices are paying $32,500 per full-time physician for various IT expenses.

Welcome to Practice Rounds, our new weekly column exploring what's being covered in the larger world of healthcare.

Cost of Techfor Physician-Owned Practices

To physician-owned multispecialty practices, according to research from the MGMA, the cost of IT equipment, staff, maintenance, and other related expenses in 2015 was $32,500 per full-time physician. The cost of these IT expenses has risen 40 percent per full-time physician since 2009, MGMA's data revealed. When you drill down to IT staff expenses, the cost of those services have risen 47 percent per full-time physician since 2009. "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 better patient care. Unless we see significant changes in the final MIPS/APM rule, practice IT costs will continue to rise without a corresponding improvement in the care delivery process," said physician, Halee Fischer-Wright, president and CEO of MGMA, in a statement.

Tavenner Talks Exchanges

Partner publication, Managed Healthcare Executive, scored an exclusive interview with Marilyn Tavenner, president and CEO of America's Health Insurance Plans (AHIP). Tavenner, former CMS Administrator, talked about the insurance exchanges and the recent departures of UnitedHealth Group and Aetna. She also talked about strategies that can be undertaken to lower the cost of pharmaceutical medications. "We need to focus on value-based pricing where improvement to a patient's quality of life factors into the true value of a drug," Tavenner said to Managed Healthcare Executive.

ONC Chief Steps Down

Physician, Karen DeSalvo is stepping down as the top chief at the Office of the National Coordinator (ONC) for Health IT, according to Healthcare Informatics. DeSalvo, who will be moving to another position at HHS, will be replaced by physician Vindell Washington, who is currently the Principle Deputy National Coordinator at ONC. DeSalvo was the head person at ONC for nearly three years. In the last two years, she split her time between National Coordinator and Acting Assistant Secretary for Health at HHS. She will maintain that role full-time as part of her new responsibilities. Before her involvement in the federal government, DeSalvo served as health commissioner of New Orleans, helping the city's public health infrastructure rebuild post-Katrina.

Zika Money Siphoned from Other Programs

With Congress deadlocked on passing a bill that would distribute funds to combat Zika, the federal government has been forced to take money from existing federal programs to continue Zika vaccine trials. According to reports from USA Today, the current allocation for Zika vaccine funding was set to run out at the end of the month. The $81 million will go to the National Institutes of Health and the Biomedical Advanced Research and Development Authority, coming from programs run by CMS and the Administration for Children and Families. The money will be used to help kick-start the second phase of the vaccine trial.

Quote of the Week:

"If you are not looking [ahead] to [MACRA], in 2019, 2020, 2021, there is a 9-percent decrease in reimbursement for the bottom 12 percent [of practices] … I can't afford to take that kind of cut because my staff will take that cut. Any decrease in pay comes out of my bottom line. In order to stay in practice and in medicine, I have to embrace this. Any physician who doesn't embrace this, they will be financially struggling in the next couple of years."

Michael Paul Gimness, family medicine physician, Plant City, Fla., Small Practices Forging Ahead in Value-Based Care.