Weathering the Business Side of the Triple Aim

What three notable health care professionals have to say about the business of medicine

“Anything that takes primary doctors away from their patients eats away at their satisfaction.”

“Just 30 years ago our biggest worries included successfully moving patient accounts and insurance claims to a computer system,” recalls Marcy Shimada, CEO of Puget Sound Family Physicians and Edmonds Family Medicine. “There was no scrutiny of medical records or documentation requirements. But while there was a lot less paperwork, there was also less evidence-based treatment.” Duane Lucas-Roberts, CEO of The Vancouver Clinic, remembers stability in payment methodology. He says the major business goals then were no different than today: achieve long-term financial strength—and breadth and depth of physician leadership—and attract and retain good people. “But today, accomplishing these things is much more challenging for most.”

Things have indeed become much more complex. Some solo and small practices now struggle to keep their doors open as they face the often prohibitive expense of maintaining a practice. Larger groups need to decide whether to focus on physician growth and clinical integration with outside systems. For sure, during the last ten years, health care has gone through tectonic changes. And as we face a new national imperative to reign in the costs of health care while improving outcomes, the pace and impact of change will continue to increase.


Several significant forces are currently shaping the business environment of medicine. These forces include consolidated and reconfigured practice models, hospital mergers, growth in the trend of hospitals buying practices and employing doctors, changes to reimbursement models, the Affordable Care Act, federal mandates on meaningful use, and newly installed HIPAA directives. When combined with each other, these forces can produce a perfect storm. Lucas-Roberts sees these forces influencing the widely accepted tenets of the Triple Aim: access, cost, and quality.

A study published in the Annals of Family Medicine predicts that by 2025 the United States will need at least 52,000 new primary-care doctors.[1] Today, 56 percent of America’s patient visits are to primary care physicians (family medicine doctors, internists, and pediatricians), but only 37 percent of physicians currently practice primary care medicine. And only 8 percent of the nation’s medical school graduates are going into family medicine, which could further constrain access.[2] “The economics of medicine are less attractive now,” says Lucas-Roberts. “There are many [career] opportunities for our most talented young people, not just medicine. The prohibitive cost of medical school, and the lack of substantive income during 7 to 10 years of training, results in high debt that sometimes tops $200,000.” Many new physicians begin their years of practicing under a tremendous financial burden.

The business of medicine can add another layer of burden to the practice of medicine. Today’s administrative requirements mean the physician has to be part accountant, tech geek, and lawyer—or hire a skilled force of professionals to keep the practice in compliance. A physician practice needs to be accountable for office appointments, phone visits, e-mailing with patients, and paperwork. Shimada says that for some physicians, the paperwork load is hard and can become depressing. “Primary care doctors want long-term relationships with patients, sometimes lasting for decades,” she says. “Anything that takes primary doctors away from their patients eats away at their satisfaction.” Lucas-Roberts adds, “Many senior physicians have lost their joy. Half their time is spent with patients. They spend the rest on notes, patient forms, workers’ compensation, complying with insurance, and phone calls.” In particular, he says, “the demands on solo practitioners and small practices are onerous; it is difficult for them to remain tenable.”

“I’m not so concerned about HIPAA,” notes Shimada. “We should be protecting patient privacy.” However, coding patients’ ailments and treatments is a big component of that endless paperwork. ICD-9-CM has 14,000 codes, and the upcoming ICD-10-CM has approximately 150,000. Shimada anticipates that this huge increase may help researchers “slice and dice data, but it won’t help patients get better or get better faster.”


Is there a silver lining to these pressures? Challenge forces innovation. Newly optimized models for access are emerging—solo, small/large group, and hospital employment are the obvious structures. But the expanding roles of physician assistants, advanced registered nurse practitioners, and other clinicians often referred to as midlevel providers create new avenues for patients to access care. This larger team of care providers may be part of the solution. In fact, Shimada strongly believes medicine is a “team sport,” so she poses a question for solo practitioners: Is this the best way to practice medicine? She points out that peer review—which informs how we practice the complex art of medicine—and office-next-door consulting are less available in solo practices yet so valuable to high-quality patient care. She questions if, in this era, it is possible to produce better medicine without these elements. Is there a practical way that solo practitioners and small practices can incorporate a team approach into their practices to decrease administrative burden and expense, while improving care? Susan Turney, MD, CEO of MGMA-ACMPE, offers advice for small practices: “It is crucial to have the right resources, staff, infrastructure, and IT to accomplish your goals.”


Even if access and quality are improved, the longer-term viability of the system may still be at stake. Current cost and reimbursement models are not yet designed to reward improvements in patient and population health. Nor are these models designed to reinforce value. “It is not a level playing field,” says Lucas-Roberts, referring to the challenges faced by small practices and by larger systems. A recent Denver Post article claims that “more than 50 percent of doctors are now employed by hospitals, and fast consolidating hospital chains often add large fees to procedures and tests that are frequently carried out in what were independent practices.”[3]

Some argue that facility fees that are three or four times higher in a hospital setting are necessary to pay for their robust infrastructure—to purchase and maintain standby services that might be needed to provide prompt, accessible, quality care in one location.[4] Those who oppose such disproportionately higher facility fees say they run counter to our nation’s goal of reigning in health care costs and point out that higher prices do not necessarily translate into better care. How long can this imbalance of fees between large and small be maintained? If the marketplace rebalances and smaller, more affordable options increase success at attracting patients, what will happen to the mega systems that can no longer afford their infrastructure?

Either way, the sobering fact is that the quality outcomes of our health care system are disproportionally low when put side by side with the amount of money we spend. This places the United States in the unenviable position of spending more on health care than any other country, yet ranking 26th for life expectancy.[5] How can we lower costs and improve care? Is there a way to combine the best of both larger and smaller care models?


“As a whole, we have invested enough in bricks and mortar. We should use what we have, not always build new buildings and add duplicate state-of-the-art machines,” Shimada says. She points out that increased revenue also goes into advertising—TV, radio, print—assuring the public that particular facilities are the biggest and the best, something our culture demands. Advertising can drive a patient to an ED marketed with a “no wait time” promise, even if a lesser-known ED is more affordable and provides excellent care. Perhaps there is a different way to promote a practice and improve health outcomes at the same time. Shimada says that her facilities’ marketing consists of outreach activities like blood pressure checks at the Taste of Edmonds event and doctors discussing bike helmets with kids at schools.

Even with strong leadership and a culture of collaboration, solo and small practices need more to survive. As changes unfold, there will be a “sifting, a winnowing,” as Lucas-Roberts says. Some, but not all, will be able to keep patient care at the center of their work and survive in the business of medicine today. As Turney advises, “One challenge for these smaller practices is to evolve and meet the demands of a new and upcoming care model, which requires investment and maybe a new way of thinking about their practice.”

Successful organizations know that longevity relies on keeping administrators, staff, and clinical providers healthy and successfully engaged. Leaders have a strong hand in creating a culture of support, respect, and the opportunity for everyone to feel that they make a difference. “This includes promoting personal health and productive work habits in everyone,” observes Shimada. Without such a culture, successful implementation of plans is difficult. As Peter Drucker (writer, professor, management consultant, and self-described “social ecologist”) said, “Culture eats strategy for breakfast.”

Dealing with change takes courage and mindful decision making, and not in a vacuum. It is heartening to see how some practice executives check their egos in the parking lot and acknowledge that the way forward lies in respect and collaboration. For example, constant dialogue between administrators and physicians can lead to a quality experience for their patients. “The key is that running a medical organization is not a one-person show,” says Lucas-Roberts. “Having a broad physician-leadership base is critical. You cannot have too many physician leaders; the more they are involved in administrative aspects and decision making, the better. I work for them, not the other way around.” The changes over the last decade have indeed strengthened the relationship between physicians and administrators. To survive, they must work, together, on what is in the best interests of the group for the long term. “We need to manage the present in the context of what we want to become five years down the road.”

  1. Kaiser Health News, “Study Predicts Shortage of Primary Care Doctors will worsen,”Kaiser Health News’ Daily Report, Nov 21, 2012,
  2. Sachin Shah, “Help for Primary Care,” Doctors for America, March 13, 2012,
  3. Michael Booth, “Facility Fees Inflate Hospital Prices for Common Services: Triple the Price for Same Health Service, as Mergers Bloom,” the Denver Post, May 14, 2013,
  4. Beth Thomas Hertz, “Facility Fees Can Change the Economic Equation: Differing Reimbursements for the Same Care Present Multiple Challenges for Healthcare System, Practices,” Medical Economics, Jan 10, 2013,
  5. Simon McKeon, “We Need to Integrate Research and Health Services, The Conversation, Oct 3, 2012,