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A shifting marketplace for physician services.

Four factors are creating a shift in the marketplace for physician services:

1. The growing complexity of science and technology

2. The increase in chronic conditions

3. A poorly organized delivery system

4. Constraints on exploiting the revolution in information technology (1)

These four factors, as articulated by the institute of Medicine Report Crossing the Quality Chasm, created an unacceptable difference in the quality of care that is possible and the quality of care that is too often delivered today.

Figure 1 illustrates the current structure of the marketplace for physician services for patients with health insurance. To simplify the model, just consider the exchanges that take place between payers, providers and patients.

In general, patients perceive a health threat and then seek the services of a physician. Patients expect physicians to share responsibility for their health problems. Physicians interact with the patient through a relationship, assess the patient's health problem and create a plan of action.

Ideally, if the problem is not an emergency, competent patients participate in the decision making and agree to the plan or alternatively they veto all or part of the plan. Physicians document the interaction and exchange diagnoses (ICD-9-CM codes) that match appropriately with services (CPT codes) for payment from payers.

This system works fairly well for acute, time-limited problems. Today, however, chronic diseases, such as coronary artery disease, congestive heart failure and diabetes are the leading causes of illness, disability and death in the United States. The management of chronic disease requires a more proactive approach to disease management by both the patient and the physician.

Studies have consistently shown that primary, secondary and tertiary prevention can dramatically lower the incidence of the costly complications of chronic diseases. In response, payers are exploring alternative payment mechanisms to encourage physicians to improve chronic illness care, and they are engaging the services of disease management companies to support the patient's self-management of their conditions.

Because the management of chronic disease requires behavior change from the patient, the communication demands on the physician are greater and require a better strategic approach compared to the management of acute disease. In addition, successful management of chronic diseases requires outcome improvements--not just process improvements.

Outcome improvement depends on the actions of both patients and physicians. For this reason, the Physician Consortium of the American Medical Association has developed performance measures that reflect the quality of care of physician services for specific chronic diseases, but also recognize the contribution of the patients when they decide to not follow their physician's recommendations.

Although the current payment structure will likely persist, the future marketplace for physician services will include an exchange of these performance measurements for payment of physician services in chronic disease management for payment. [See Figure 2]


Successful chronic disease management will require physicians to integrate population-based medicine into routine clinical care.

Electronic medical records are designed to improve physician productivity in the current physician service marketplace, but are not necessarily designed to assist physicians to better manage chronic disease.

The essential tool for assisting physicians in chronic disease management is electronic patient registry software, either stand-alone or as part of an electronic health record. This software serves three essential functions:

1. Assistance at the point-of-care

2. Identification of patients in need of outreach

3. Generating reports on subpopulations of patients for either internal or external reporting requirements (2)

The growing complexity of science and technology and the sheer volume of information necessary to deliver high-quality, evidenced-based care creates the need for better decision support at the point-of-care. Memory alone is no longer sufficient.

Evidence-based clinical guidelines reflected in the use of quality measures that are embedded in the patient registry component of an electronic health record offer the best solution to support the patient-physician relationship at the point-of-care in today's environment.

The electronic patient registry software also helps identify patients between office visits who are overdue for necessary services and may be having trouble following their plan of care. These patients need assistance in patient self-management support. The electronic patient registry software supplies aggregate data reports of the status of the population of patients being followed.



In the future, the electronic patient registry, either alone or as part of an electronic health record, will supply the reporting requirements necessary to exchange quality measurement data for payment.


A shifting marketplace creates opportunities as well as challenges. Primary care physicians and medical practices with foresight and a clear vision of possible future scenarios will do well.

Physician groups that have developed the capacity for reporting quality measures will be rewarded; physician groups that do not develop that capacity will progressively fall behind. Here are four strategic steps to consider:

1. Focus on the patient. (The mission has not changed. Everyone is here for the same reason--to serve the patient.)

2. Work as a team with a shared vision. (Everyone knows where we are; everyone knows where we are going.)

3. Design the information system to support the work for today and for tomorrow. (Everyone gets the right information at the right time to do his or her work.)

4. Continuously improve your processes. (Everyone plans, everyone measures and everyone challenges the status quo.)

Just as the answer usually lies within the question and the solution lies within the problem, the strategy to return to a high-quality, high-performing health care system lies within the four factors that have created the discrepancy between the care that is possible and the care that is too often delivered.

As physicians take advantage of the revolution in information technology, the health care system will become better organized with improved flow of information across boundaries.

As information flow improves, the management of chronic conditions will improve and, despite the growth in complexity, the medical profession will develop the information tools and new management skills necessary to care for the sick, just as they have for over 2,000 years.

Kevin Fergusson, MD, MSHA is medical director for the Physician Office Quality Improvement Organization Support Center (QIOSC) at the Virginia Health Quality Center in Glen Allen, Va. He can be reached at 804-289-5320 or


Disclaimer: The analyses upon which this article is based were performed under contract number 500-02-VA03, entitled "Utilization and Quality Control Peer Review Organization for the Commonwealth of Virginia," sponsored by the Centers for Medicare & Medicaid Services, Department of Health & Human Services. The content of this article does not necessarily reflect the views or policies of the Department of Health & Human Services, nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Government. The author assumes full responsibility for the accuracy and completeness of the ideas presented. This article is a direct result of the Health Care Quality Improvement Program initiated by the Centers for Medicare & Medicaid Services, which has encouraged identification of quality improvement projects derived from analysis of patterns of care, and therefore required no special funding on the part of this contractor.


1. Institute of Medicine, Crossing the Quality Chasm: A New Health System for the 21st Century, National Academy Press, 2001.

2. Metzger J, "Using Computerized Registries in Chronic Disease Care," California HealthCare Foundation, February 2004.

By Kevin Fergusson, MD, MSHA
Integrating Population-Based Medicine into Routine Clinical Practice

1. Define the Population
2. Create an Office Information System
3. Identify and Prioritize Patient Groups
4. Identify the Intervention to Use
5. Adapt the Office System
6. Monitor and Assess

Figure 3. American Medical Association, Roadmaps for Clinical Practice:
A Primer on Population-Based Medicine, 2002.
COPYRIGHT 2005 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Electronic Health Records
Author:Fergusson, Kevin
Publication:Physician Executive
Article Type:Author Abstract
Geographic Code:1USA
Date:Jul 1, 2005
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Next Article:Using mediation to resolve disputes in health care.

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