Back-Office, online

Internet-based practice management for doc groups soon to be available

By Ron Shinkman

Medical practice management through the Internet may soon explode-on a small scale.
Those likely to benefit the most are involved in back-office management-the handling of patient appointments, referrals and insurance claims. It's been the bane of small physician practices for decades, and it is often a common complaint when physicians talk about the travails of managed care.
Back-office work can be overwhelming when done manually, gobbling up valuable support staff hours. And doing back-office work the old-fashioned way can be costly as well, given that some health plans have chosen to financially penalize providers who don't file claims electronically.
In the past few years a number of new software companies have been pushing in-office computerized management systems, including Medical Manager and MediSoft. While tremendously helpful, such systems can be difficult to learn quickly and prohibitively expensive for a small practice, costing anywhere from the low five figures to as much as $100,000, according to industry observers. That does not include regular software and hardware upgrades.
In the past year, the notion of physician practice management through the Internet-eliminating the in-office computer systems entirely-has grabbed its share of headlines. One of the most visible healthcare internet firms, Santa Clara, Calif.-based Healtheon/WebMD, handles some physician transactions through it's recently launched WebMD.com and claims 60,000 physician member. It also has more extensive information management agreements with a national PPO, Irvine, Calif.-based Beech Street Corp., and Brown and Toland Medical Group, a San Francisco-based physician practice management firm.
Yet a gap of sorts remains to be filled. A survey Healtheon conducted last year suggested that while there was a 300% increase in physicians using the Internet from 1997 to 1999, more than a quarter of the 10,000 physicians surveyed cited the "lack of meaningful network content and services" as the main reason they didn't use their computers more.
Although Healtheon has been building its business by catering to both physician and consumer needs, some less-visible firms have focused on physician back-office tasks, particularly those encountered in small practices. Two such firms, St. Louis-based P-Med.com and Calabasas, Calif.-based Progressive Health Systems, have begun to claim their stakes in this emerging market. Their products require a doctor's office to provide little more than an Internet connection and someone willing to type.
P-Med.com first offered its own back-office management software shortly after the company was formed in 1993. It begun offering an Internet, Windows-based application in early 1999 that manages patient appointments, billing, proof of insurance coverage, laboratory services and specialist referrals, by late last year it had signed up 200 practices with an average size of three physicians. It charges for its services on a sliding scale starting at $250 a month.
"What we want is to be the America Online of this type of philosophy," says Keith Marks, P-Med.com's chief executive officer. Although P-Med.com's software system can be scaled to accommodate larger physician practices, it can also fulfill the back-office needs of a single doctor, he adds.
Progressive was started only last year, mostly by a group of physicians affiliated with 35-doctor Community Medical Group in Calabasas. Progressive CEO Marvin Kanter, M.D., says he expects his company's services to be available later in the first quarter of 2000, although they will at first be confined to medical practices in the surrounding area. Like P-Med, the focus will be on small physician practices.
"Smaller practices don't have a capability to deal with their claims and administrative tasks in a quick and efficient manner, and we'll offer them that opportunity," says Joan Rose, Progressive's chief operating officer.
Kanter noted that the ideal client will likely be a medical group with two to five physicians. "We can do patient-record conversions to our database on an individual basis," he says.
Kanter believes that along with having a tidy and inexpensive way to keep track of patient records, practices will likely benefit down the line as their staff becomes highly proficient with Progressive's product. "They will be able to use fewer full-time support staff," he says.
Although Progressive will offer a range of services similar to those of P-Med.com's, it will use software developed by Burlington, Vt.-based IDX systems Corp. (P-Med.com's system was developed in-house) Progressive is testing its back-office software with the cooperation of Community Medical Group.

Back to top