CEO of ModuleMD, a leading specialty-focused EHR.
In my work with specialty-focused EHRs, I have closely observed business issues encountered by independent practices and the distinctive challenges faced within their specializations. Of note, a physician I worked with has continued to grow his practice, despite the challenges many clinicians encounter within the healthcare system. This physician attributes his profitability in part to reports that help optimize prescription costs relative to insurance reimbursem*nt. This is the type of ingenuity and business acumen I believe is needed for a practice to be successful within the U.S. health system. As in other industries, I have found that putting innovative technologies at the forefront of business strategy can enhance efficiency, enrich workplace experiences and refine the patient journey for these practices.
Clinicians are often ideally positioned to drive feature enhancement technologies that set higher standards in practice management and address specialty-driven challenges for practices struggling to stay independent. However, the effectiveness of these contributions can also rely on medical practices selecting specialty-specific technology vendors that listen and adapt to address the broader structural challenges within the industry's landscape, influencing the trajectory of specialized care.
Understanding The US Healthcare Oligopoly And Its Implications
The U.S. healthcare sector, with annual expenditure of $4.3 trillion (subscription required), represents a massive market. Despite its scale, most segments within healthcare operate as oligopolies, wherein few large players hold dominant market share. For example, according to the Economist, four insurers cover half of all enrollments, four pharmacy chains control 60% of drug dispensing, three pharmacy benefit managers handle 80% of prescription claims, and 92% of drugs are distributed by three wholesalers.
This oligopolistic structure poses anti-competitive challenges akin to monopolies, including margin exploitation, hindrance of new market entrants and a tendency toward acquiring businesses in other parts of the value chain. As a result of consolidation, the already high healthcare costs are likely to escalate further.
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Medical practices are facing the perfect storm with staffing shortages, declining reimbursem*nts and a growing burden of regulatory compliance. Without the technology tailored to their unique business needs, burnout continues to drive physicians to sell their medical practices. Today, 70% of all physicians in the U.S. work for hospitals or corporate entities. This shift within the healthcare sector raises questions about the sustainability of independent medical practices, potentially impacting the quality and diversity of healthcare services available to patients.
EHR Evolution In Healthcare IT
EHRs are a backbone of U.S. healthcare IT, a segment with annual spend of $100 billion. Built in the late 1990s to early 2000s (in response to the Center for Medicare and Medicaid’s Meaningful Use legislation), EHRs have evolved from simple systems-of-record into comprehensive ecosystems with many mission-critical products and tech-enabled services. Modern EHRs integrate information from various sources through national health information networks and hold a complete record of a patient’s medical and treatment history. Beyond medical records, comprehensive EHRs automate all essential functions across clinical care, medical billing, practice management and patient engagement.
Today, there are 753 ONC-Certified EHRs, which my team narrowed down to about 435 unique vendors. According to IBISWorld's "Electronic Medical Records Systems in the U.S.," the EHR market is about 27.6% ambulatory care (medical practices) and 72.4% acute care (hospitals). The hospital EHR market, like other healthcare segments, is dominated by four players holding 85.3% share.
The medical practice EHR market remains fragmented due to several specialties remaining out of the fray of hospital acquisitions, meaning practices within these specialties have not been forced to switch to a hospital EHR. Specialty practices can have extremely diverse workflows (e.g., dermatologist versus optometrist), customizations that comply with different regulations (e.g., USP 797, which impacts practices that compound treatment sets for allergies or rare diseases), and medical billing scope requiring specialized knowledge. Specialty-focused EHRs have therefore had to become more than mere data repositories to actively contribute to the success and independence of these medical practices.
A Blueprint For Improved Practice Performance
If your practice is looking to approach the process of incorporating a specialty-focused EHR, I recommend carefully considering EHR solutions designed to solve your most pressing issues. Here are six capabilities to look for when evaluating a technology solution for your medical practice.
1. End-To-End Automation: Automation helps reduce the need for staff intervention and enables paperless practices in areas like scheduling, forms, integrated devices, post-appointment surveys, recalls and other activities. I recommend looking for a comprehensive tool that streamlines the entire patient intake and engagement process and includes rigorous automation in medical billing to ensure high collection rates.
2. Technology For Clinical Workflows: Ensure that specialty-specific workflows and automations are embedded throughout the system, from diagnosis to prescriptions to charge entry and post-care follow-ups. Specialization, done correctly, can result in fewer clicks, which helps reduce user fatigue.
3. Centralized Accountability: Single-point accountability for non-clinical activities (e.g.: full-cycle medical billing) is important for operational and cost efficiency. Armed with in-depth knowledge of their respective specialties, specialty-focused EHRs often offer these services and can function as an extension of your practice.
4. Optimization Options For Working Capital: Patient cost estimators can enable your practice to collect patient payments upfront. I also recommend seeking specialty-specific capabilities such as inventory management that can streamline your working capital.
5. KPI Management: Look for an EHR solution that stores all data in a single database software. This transparency can help you track and ensure healthy KPI ratios for your patient and payer mix and medical billing (e.g., net collection, accounts receivables cohorts).
6. Cloud Infrastructure: A modern cloud suite can strengthen your practice's security and scalability as well as help minimize unnecessary IT costs. Cloud adoption has led to a proliferation of new tools, so it is important to keep an eye on innovations for your specialties. For instance, look for a specialty EHR that is investing in AI—with a treasure chest of concentrated data, they can help build AI capabilities to assist your practice in predictive decision-making and workflows.
While they may not have corporate-sized budgets, small- to medium-sized medical practices can tip the scale in their favor by embracing a tech-first strategy and implementing a comprehensive EHR. Consider how you can lean on these six hallmarks to find the best EHR system for your practice and contribute to a robust healthcare economy.
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