I have recommended that all physicians read the recent article posted in the Annals of Internal Medicine.  It spells out the Obama administration’s design for the new healthcare system. This also is a MUST READ for all practice managers. In a nutshell, healthcare reform will usher in a new reimbursement system called “outcomes based, bundled billing”. Physicians will be organized into large vertically integrated groups and will offer “coordinated care” for certain disease conditions. Rather than each physician billing for their services, the group will receive a “bundled fee” based on the overall care and outcome of the case. Each physician involved in the case will get some share of the pie, depending on the contracted arrangement with the “vertical organization”.

The idea of a “vertical organization” is to provide more coordination of care and payment based on successful management of the case. Also, it is intended to reduce the inefficiencies and waste produced by un-coordinated care from multiple doctors in small practices.

Do the math. If, for example, twenty-five practices of various specialties are organized into a vertical organization, what do you think will happen to the administrative staff of each practice. The whole idea is to cut cost and waste. That means fewer employees and managers at the home office. If you doubt this prediction, just ask what happened to the practice managers of practices that have been purchased by hospital systems.

This may sound like doom and gloom for all practice managers, but it is not. There will be great opportunities for those practice managers who can help launch their practice into the future. There is no time to wait. The wheels of change are in motion.