Given the annual, and unsustainable, growth in nationwide healthcare spending, Schwartz and his partners understood that major payers, including the government, "at some point in time would hold providers accountable for clinical efficiency," he says. So he and his partners decided to be proactive. By 2002, the practice had implemented a fully automated electronic medical record with computerized physician order entry, which allowed them to focus on letting their clinicians spend more time with patients and understand their needs. It also qualifies the practice for meaningful-use incentive money, although that had yet to become an incentive.
"We had a passion for operational efficiency because having extra employees and wasting money was squandering our opportunity to be good stewards for ourselves and our patients," he says.
Schwartz says the proof that the PCMH program at Westmed is a differentiator among patients has been its "phenomenal growth" in a market where the population is stable at best. (The practice started with 16 physicians in 1996 and now has 185 doctors.) What Westmed hasn't demonstrated is that it can operationalize its PCMH for all 200,000 patients. But Schwartz is confident he can make that happen.
"We have some performance contracts with insurers and we use about 20% less of their services than other practices," he says. "We anticipate that the accountable care world will be profitable for us."
Westmed's proactive approach has helped it stay independent in an era in which hospitals are feverishly acquiring practices to complete the circle of accountable care.
"Hospitals hate us because we are their worst nightmare," he says. "We do all our own outpatient services, imaging, and lab work. That could be 40% to 50% of their business. They don't like that, and they don't like that as our inpatient utilization goes down, we're taking away market share, and that market share is vaporizing."