SIC 8011
OFFICES, CLINICS OF DOCTORS OF MEDICINE



This industry consists of offices and clinics of licensed medical doctors, excluding doctors of osteopathic medicine (covered in SIC 8031: Clinics of Doctors of Osteopathy ). These establishments are engaged in general or specialized medicine or surgery. This category includes the offices of the following types of medical specialists: anesthesiologists, dermatologists, gynecologists, neurologists, obstetricians, oculists, ophthalmologists, orthopedic physicians, pathologists, pediatricians, plastic surgeons, psychiatrists, psychoanalysts, radiologists, medical surgeons, and urologists. Clinics covered in this category are free-standing—not associated with hospitals—such as ambulatory surgical centers, free-standing emergency medical centers, primary care medical clinics, and outpatient psychotherapy and women's health clinics.

NAICS Code(s)

621493 (Freestanding Ambulatory Surgical and Emergency Centers)

621491 (HMO Medical Centers)

621112 (Offices of Physicians, Mental Health Specialists)

621111 (Offices of Physicians (except Mental Health))

Industry Snapshot

According to the U.S. Department of Labor, Bureau of Labor Statistics, in 2001 there were 856,350 people serving as healthcare practitioners and technicians, including 66,700 family and general physicians; 42,420 surgeons; 41,370 general internists; 19,500 anesthesiologists; 18,200 general pediatricians; and 13,970 obstetricians and gynecologists. On average, a physician sees over 100 patients each week, with general and family physicians averaging slightly more than specialists.

The operation of office- and clinic-based physician practices has been strongly influenced by ongoing changes in the entire healthcare industry. Increased healthcare costs, coupled with decreased federal funding, has pushed practitioners to closely evaluate their practices and patient base. At the turn of the twenty-first century, physicians were also adjusting to new options in technology that could finally convert multiple filing tasks into automated computerized systems that, although expensive to install, were expected to provide better quality-of-care and overall cost savings.

Organization and Structure

This industry is organized mainly according to the type of practice or medical specialty performed at an establishment. The 1980s introduced another classification within this industry based on whether a doctor was working completely independently or through a group, such as a health maintenance organization (HMO) or a preferred provider organization (PPO). Managed care also cultivated the increase of practice consolidation by putting added pressure on solo and small group practices. Smaller practices did not have the ability to negotiate sufficiently favorable managed care contracts to keep them in business. The proportion of physicians with managed care contracts increased from 56 percent in 1986 to 83 percent in 1995, with little variation between specialties.

In the past, most physicians were self-employed and ran their offices in a partnership or group, sharing office help and medical assistants. During the 1980s, some physicians started to franchise, which involved paying a franchiser to handle administration, such as billing and insurance claims. The number of self-employed, patient-care physicians in solo practices dropped from 40.5 percent in 1983 to 26.3 percent in 1995. The number of self-employed physicians in group practices fell from 35.3 percent in 1983 to 28.3 percent in 1995. The number of physicians employed by a health care company, however, rose from 24.2 percent in 1983 to 45.4 percent in 1995.

Of those physicians employed by an outside agency in 1995, 31 percent worked for physician groups and 8 percent for staff-model HMOs. Many staff-model HMOs were quite large in 1996, with as many as several thousand physicians. By the late 1990s, many physicians either merged with larger medical groups or sold their practices to hospitals. This trend led to the development of physician-hospital organizations (PHOs) and management services organizations (MSOs).

PHOs far outnumbered MSOs in 1995, creating a partnership between physicians and hospitals with equal management weight to each. Also a hospital partnership, MSOs require physicians to purchase shares in the MSO, which provided management services and equitable management to both hospitals and physicians. In MSOs, physicians could later sell their shares in the organization for profit.

Physicians who sold their practice in 1995 received generous compensation. Specialty and multi-specialty practices had the highest median value per physician at $244,000, plus a base salary. More than 80 percent of the physicians who sold their practices could also receive bonuses in future years. The largest number of physicians who sold their practices in 1995 were primary care physicians, especially family physicians and internists.

Doctors' offices and clinics play an important role in the overall operation of the health care industry. Doctors usually work with one hospital and refer patients to that hospital for tests and treatment. For this reason, the relationship between doctors and hospitals is often regarded as a buyer-seller relationship, in which hospitals approach local doctors for their patients. In addition, doctors are also buyers in their relationship with pharmaceutical companies.

Background and Development

While the convention of doctors working in some institutional or hospital-like establishment dates back to ancient Egypt, doctors' offices as independent establishments emerged in the Middle Ages with barber-surgeons. These independently employed doctors worked in their offices or in patients' homes and received payment for their services as they were provided. Doctors who cared for patients in hospitals received no payment from their patients or the hospital. In the nineteenth century, however, hospitals began paying doctors, and the profession grew rapidly.

During the twentieth century, the role of the physician changed with economic, government, and societal pressures, along with technological advances. In the early part of the century, doctors in the United States were a highly autonomous group, which was held accountable to the standards defined by the profession itself and not the general public, according to Harold M. Swartz and Ann Barry Flood in Money, Power, and Health Care.

The gap in salaries between primary care physicians and specialists grew significantly in the twentieth century. As a result, there was a general shift from primary care physicians to specialists. The use of HMOs and provider networks to cut medical costs also changed this profession from wholly self-employed doctors to those working on salaries for hospitals, HMOs, and provider networks. By 1995 the average share of physicians' revenues from managed care rose from 11 to 27 percent, with a higher proportion going to primary care physicians.

Technical advances in this industry were abundant during the twentieth century. From 1900 to the 1950s, the development of antibiotics and public health initiatives—such as water treatment—increased physician effectiveness in many parts of the country and simultaneously decreased the need for doctors in many respects. Wars and increases in population and fatal crimes offset this pattern, however.

During the second half of the twentieth century, technical developments increased doctors' roles in health care; many diseases, such as Hodgkin's disease and leukemia, were now treated with chemotherapy. Moreover, detecting disease became more practiced with new technologies for diagnosis. The development and use of these technologies, however, was regulated by governmental bodies and insurance companies.

The second half of the twentieth century also witnessed a growth in freestanding clinics. By the end of the 1980s, there were 23,000 licensed clinics in the United States, according to the General Accounting Office (GAO). These included outpatient ambulatory care facilities, outpatient surgical centers, psychiatric and psychotherapy clinics, and obstetric/gynecological clinics.

The rapid proliferation of clinics posed problems for state regulators of these facilities. According to a 1989 GAO report, state health regulators were concerned about the complex appeals systems between patients and clinics and were disturbed to find that roughly one-half of the states did not have any means of resolving patient complaints against clinics.

The government acknowledged the growing need for psychiatric outpatient care in 1989 when it increased its coverage for such care under Medicare. The program opted to provide more types of psychiatric and psychotherapy care and to increase the caps on payments.

In the 1980s physicians broke with a long-held tradition by advertising their services. This new practice was the focus of much debate within the profession and was initially regarded by many physicians and other health care providers as unprofessional. By the end of the 1980s, however, advertising in newspapers, television, and radio became common. By 1992 doctors' offices and clinics spent roughly $50 million annually in advertising, with a 13.7 percent growth rate in advertising expenditures.

Plastic surgeons spent an estimated $30 million on advertising in 1990; this amount was a 400 percent increase from 1985. In large part the increase was due to societal changes that made plastic surgery in general more acceptable. According to the American Society of Plastic and Reconstructive Surgeons, in 1987 nearly 50 percent of all Americans found plastic surgery acceptable, compared with 35 percent in 1982. In addition, advertising by plastic surgeons increased because a larger number of doctors went into plastic surgery and had consequently increased competition.

Due to increased health care costs and rising competition among doctors seeking business, the late 1980s witnessed a surge in consumers seeking medical information outside doctors' offices. Nurse-call lines, self-help medical books, and educational videotapes started to compete with doctors' offices. Some offices and clinics, however, adapted to this trend by showing videotaped programs as a way of educating patients about procedures and the treatment options available.

Company Clinics. By the end of the 1980s, large companies across a variety of businesses greatly expanded their company clinics in response to rising health care costs. By 1990 about 12 employers sponsored clinics for their employees. Many of these clinics were operated by the companies themselves and others were operated by medical management companies. One of the primary ways in which these clinics brought down medical costs was through the hiring of doctors on salaries on the assumption that salaried physicians did not have incentives to perform unnecessary tests, according to Jerry Geisel in Business Insurance.

In 1992 John Deere was the first company in the United States to set up a primary care clinic for its employees in conjunction with a third-party hospital, the Mayo Clinic of Rochester, Minnesota. The largest company clinic in the country was operated by Southern California Edison Company, which had 10 medical clinics and first-aid stations, employed a staff of 70 and facilitated more than 100,000 patient visits annually. Similarly, the Gillette Company and Goodyear Tire & Rubber Company sponsored corporate primary care clinics and offered incentives for employees to use them.

Medicare and Medicaid. Medicare and Medicaid are government programs providing financial assistance for medical treatment. The Medicare program is designed for individuals at least 65 years old and for the disabled, while Medicaid helps families with low incomes. Government funds for these programs come from both federal and state sources and primarily through Social Security payroll taxes.

In 1997 more than 55 million people received Medicare and Medicaid payments. Medicare payments for doctors, clinics, laboratory services, end-stage renal disease treatments, and continuous-use medical equipment—such as wheelchairs—totaled $51.7 billion in 1997, with $38.2 billion going to physicians. Medicaid payments going to both hospitals and doctors and other health care facilities and providers totaled $123.6 billion in 1997.

Though Medicaid expenditures nearly doubled between 1990 and 1997, growth dropped to 2.8 percent from 1995 to 1997. In 1997 Medicare paid for 20.7 percent of the 787.4 million patient-visits to office-based physicians, while Medicaid financed another 8.1 percent of total visits. Private insurance covered 53.1 percent of 1997 visits to office-based physicians.

Medicare and Medicaid greatly affected this industry by increasing administrative duties involved in handling paperwork and by setting costs for medical services. Since the late 1980s lawmakers have tried to reduce Medicare and Medicaid financing by shifting coverage to promote outpatient treatment over extended hospital care.

In 1991 the Medicare program was reduced by $43 billion as part of the federal government's economic budget changes. In 1992 the Health Care Financing Administration, which managed Medicare, started a plan to change how doctors were paid by the government. Under the new plan, doctors' fees were based on resources and the doctors' time in consultations, rather than on procedures performed by the physicians. This arrangement was set up to attract primary care physicians who felt the old system was unfair. The American Medical Association (AMA) opposed total use of this system, pointing out that some unfairness to specialty doctors needed to be worked out of the system before private insurers adopted it for their payment plans. At the end of the 1990s the cost of Medicare was still a hot topic for political debate pertaining to the goal to balance the budget and create health care reform.

Malpractice. The Insurance Information Institute (III) reported that the number of medical malpractice claims filed against doctors peaked in 1985 at 17.8 per 100 doctors and then fell for the rest of the decade, dropping to 8 claims per 100 doctors by 1989. During the 1990s the rate of increase in the number and size of claims tended to fluctuate, according to the III. The malpractice insurance market attracted new entrants in many states, increasing competition and holding down rates.

Due to the proliferation of malpractice suits, the practice of defensive medicine increased considerably. Defensive medicine refers to excessive precautions doctors take in order to safeguard themselves against possible malpractice suits. Precautions that doctors often took in treating patients included ordering duplicate tests, requesting additional diagnostic procedures, and using consultants. According to the AMA, in 1992, defensive medicine added $15 billion to the cost of health care nationwide. In 1991 medical malpractice represented $9.1 billion of total tort costs in the United States; of that total, 58 percent was incurred by physicians. In 1993 the number of malpractice claims had been reduced by state health regulators imposing caps on suit awards and by the insurance industry and medical profession—represented by more than 30 medical associations—together advocating tort system reforms.

Obstetricians and gynecologists were among the doctors most commonly sued for medical malpractice in the early 1990s. According to a study conducted by the American College of Obstetricians and Gynecologists, in 1992 about 27 percent of all claims against gynecologists were for failure to diagnose a medical condition, usually breast cancer. The average payment for claims won against gynecologists was reported at $92,500 in 1990. Approximately 33 percent of all obstetric complaints were for infant brain damage. The average payment for obstetric claims was $311,400 in 1990. Given the frequency and costs of these claims against obstetricians and gynecologists, their average insurance premiums were $36,946 in 1991, while the average for all physicians was $15,900. Insurance payments and claims awards, however, varied considerably from state to state.

Malpractice cases also strained the relationship between physicians and hospitals. Hospitals had higher insurance coverage and more general funds to cover malpractice cases; consequently, many claims involving doctors were directed at hospitals in order to receive higher awards.

According to a 1993 study by the Health Research Group of Public Citizens, the most common complaints against doctors were for negligence, misprescribing drugs, and substance abuse by the physicians. The study also showed that 150,000 to 300,000 medical negligence cases were not disciplined by such measures as revoking or suspending licenses. The AMA responded to this study by pointing out that physicians as a group acted as a self-correcting organization, whereby doctors did not refer patients to doctors with reputations for such practices. Moreover, as pointed out at the time of the study, many states did not have the funds to investigate the many claims against doctors.

One measure taken to protect patients from consulting with negligent doctors began in 1990 with the establishment of the National Practitioners Data Bank. Owned by the federal government, this computer data bank stored and provided information about physicians who had their licenses suspended or who faced disciplinary action for negligence and helped to prevent these physicians from setting up new offices.

Other ways of dealing with malpractice cases and the costs they placed on health care included placing caps on the size of awards for personal suffering; this system has been used in California since the late 1970s. Under health care reform programs discussed at the federal level in 1993, most of the cost of malpractice awards would be paid by HMOs and other health management organizations.

Self-Referrals. In the mid-1980s, consumer groups drew attention to physicians who referred patients to laboratories totally or partially owned by the doctors, a practice known as "self-referrals." In 1992 a study conducted by the Health Care Financing Administration estimated that at least 25 percent of independent laboratories were financially tied to individual physicians. The same study reported that Medicare patients who were referred by physicians to laboratories they owned received 45 percent more lab tests than other Medicare patients. Some sources estimated that the annual excess in costs as a result of self-referrals was roughly $140 million; others estimated the costs in the tens of billions.

Federal legislation was expected to be drafted to prohibit physicians from making self-referrals for Medicare patients. State legislators had been adopting similar laws to cover patients on private insurance.

Doctors' Offices Dispensing Medicine. Since the early 1900s, when licensed physicians gained the legal right to prescribe drugs, doctors' offices and clinics had dispensed drugs in limited numbers to patients. Originally, this practice was not done for profit; during the 1980s and into the 1990s, however, drug dispensation began to increase rapidly. This increase was prompted by high profits and persuasive marketing by the pharmaceutical repackaging industry. Pharmaceutical repackagers purchase drugs in bulk and repackage them in small units, allowing doctors to maintain a stock of a large variety of drugs at their offices. In 1987 about 5 percent of doctors' offices and clinics routinely dispensed these repackaged drugs; by 1993, nearly 50 percent of doctors' offices and clinics were dispensing repackaged drugs.

The dispensing of drugs out of doctors' offices and clinics caused friction between the medical doctors and the pharmaceutical industry. Moreover, this practice raised ethical issues within the medical community. Health care professionals disagreed as to whether doctors should engage in competition with pharmacists and whether doctors, who were generally not as well trained in medicines as pharmacists were, had the qualifications to routinely dispense drugs.

In 1988 the federal government tried to amend the Food, Drug, and Cosmetic Act to restrict doctors from selling drugs out of their offices, with the exceptions of emergencies or cases in which patients would have difficulties getting to a pharmacist. The amendment did not pass, and the federal government has since prohibited states from passing similar laws that restrict doctors from dispensing drugs.

According to the National Center for Health Statistics, the number of people who used the services of doctors' offices and clinics gradually increased throughout the 1980s, with the largest increases occurring in cities. This industry also benefited from the aging population, which was reflected in the growth in geriatric medicine and the offices of ophthalmologists—where technical innovations provided eye surgery for the elderly.

In the 1990s this industry faced challenges to its organizational structure and its means of making a profit. The economic needs of employers and the expected government reforms have changed the industry's structure from individual practices to group care. The rising costs of health care also introduced new ways of pricing services provided by doctors. In addition to the new system adopted by Medicare, which attempted to establish salary parity between primary care doctors and specialists, private insurers and health provider networks imposed caps on the costs of doctors' services. Government efforts at health care reform were also expected to reduce the time doctors' offices spent in handling paperwork; according to the Lewin-VHI health consulting firm, 20 percent of health dollars spent in 1993 went to administrative costs.

Organizational changes also occurred in this industry as health care moved from inpatient to outpatient surgery. Ambulatory surgical centers, ophthalmology clinics, and gynecology clinics were the fastest growing of these outpatient centers, estimated at nearly 1,500 in 1991. The growth of managed care has promoted the trend toward practice consolidation and significantly reduced the number of self-employed, solo practice physicians.

This industry experienced a shortage of primary care physicians, particularly in rural areas. The more lucrative specialists' salaries drove medical students away from primary care. Rural areas were even less desirable for primary care physicians because salaries were generally smaller than those offered in cities, and physicians preferred to live in metropolitan areas. From 1985 to 1994, the number of physicians in relation to the population increased 11 percent in nonmetropolitan areas compared to 16 percent in large metropolitan areas (populations over one million) and 19 percent in small metropolitan areas. Rural hospitals attempted to attract more primary care physicians by offering income guarantees for doctors who joined local practices, and state governments helped rural practices in recruiting new doctors.

Current Conditions

As in the entire health care industry, changing government regulations and funding made a deep impact on the manner in which office- and clinic-based physicians practice and conduct business. According to a 2002 study by the American Academy of Family Physicians, nearly 22 percent of family physicians surveyed said they no longer accept new Medicare patients, a 28-percent increase from a similar study done the previous year. The paperwork hassles combined with a decreasing pay schedule, which dropped 5.4 percent in 2002 and another 4.4 percent in 2003, mean that Medicare patients are too much work for too little return. Of those physicians who are not outright refusing Medicare patients, nearly 25 percent have placed limits on the number of Medicare patients they will retain on their books. According to doctors, reimbursements simply do not cover their over-head, making Medicare billing for many a money-losing endeavor.

In 2003, physicians were also working to keep ahead of the technology learning curve as computer-based programming and Internet-related technology began to transform the way doctors conducted their businesses. In the 1980s few physicians' offices had a computer, and all offices kept track of the paperwork associated with their patients and a handful of insurance companies in a manual filing system. Twenty years later, a doctor's office may have over a thousand insurance company claims on file, each with specific rules for filing and reimbursement. New programming and technology was expected to begin to allow for computerized patient records as well as online insurance claims. These anticipated changes should result better care as patients' files become more quickly accessible and updateable. Doctors should also benefit from cost-savings related to increased efficiency and quicker reimbursement. According to a Modern Physician survey conducted in 2000, over 63 percent of physicians surveyed said that they would be using computer-based medical records systems within three years, up from just 21 percent in 2000.

Industry Leaders

Since many doctors were self-employed or in small group practices, this industry's leaders during the 1990s were companies that owned and managed large groups of doctors' offices and clinics. In 1996 there were 166 of these physician practice management companies, employing more than 40,800 medical and nonmedical personnel. Most of these companies were privately held, while a handful were publicly traded and a few others were subsidiaries of hospitals. As the decade ended, however, this segment of the industry found itself under increasing financial pressure, and a number of companies bailed out of the business. Originally set up to relieve physicians of such nonmedical concerns as mushrooming paperwork, capitated payments, and the rise of managed care, the practice management companies began foundering because of ineffective cost controls.

When MedPartners, headquartered in Nashville, Tennessee, went public in 1995, it had 6,000 physicians under its banner. However, after posting continuing annual losses, culminating in a $1.2 billion loss in 1998, MedPartners filed chapter 11 bankruptcy, reorganizing as Caremark, a pharmacy benefits company. In a similar vein, Phycor went public in 1992 with 3,800 physicians on its rolls. After reporting earnings of $81 million in 1994, the company reported a net loss of $444 million, and stock prices plummeted from a high of $40 per share to $0.10 per share. The company followed MedPartners into bankruptcy and reemerged in July 2002 as Aveta Health, which focuses on health care risk management. PhyAmerica Physician Group, another leader in the field, also ended up in bankruptcy court in 2001.

Workforce

According to the U.S. Department of Labor, Bureau of Labor Statistics, doctors' offices and clinics employed a total 2,046,760 people in 2001. Of that total, 42 percent, or 856,350 people, were healthcare practitioners and technicians, including 66,700 family and general physicians; 42,420 surgeons; 41,370 general internists; 19,500 anesthesiologists; 18,200 general pediatricians; and 13,970 obstetricians and gynecologists. Registered nurses and licensed practical and vocational nurses accounted for 216,880 and 91,340 jobs, respectively. Radiologic technologists and technicians held 41,140 jobs, and medical records and health information technicians held 43,370 jobs. The median annual salary of a family practitioner in 2001 was $123,070; general internist, $130,880; obstetricians and gynecologists, $137,230; anesthesiologists, $138,120; and surgeons, $139,020.

Healthcare support occupations totaled 285,640, or nearly 14 percent, of the industry's workforce. Of that total, medical assistants accounted for 202,810 jobs. Office and administrative support occupations accounted for 751,200 jobs in doctors' offices and clinics. Medical secretaries numbered 152,190, and receptionists and information clerks totaled 153,510. Other significant in-category positions include office managers and administrative support workers (65,620), billing and posting clerks (89,600), file clerks (35,570), and bookkeeping, accounting, and auditing clerks (29,750). The median annual salary for the healthcare support occupations in 2001 was $25,580.

Registered nurses working in doctors' offices and clinics assist physicians by administering medications and treatments and by performing routine laboratory and office work. They receive their training through bachelor and associate degree programs in nursing or through three-year diploma programs in hospitals. They must pass a licensing examination to obtain a nursing license. Nurses working in doctors' offices and clinics reported annual salaries of roughly $47,560 in 2001. As of 2001, the entire healthcare industry continued to suffer from an overall lack of registered nurses.

Physician assistants support physicians and provide routine diagnostic, therapeutic, and preventive health care services under the supervision of a physician. Physician assistants take medical histories, examine patients, order and interpret laboratory tests and X-rays, make preliminary diagnoses, and treat minor injuries. Physician assistants must complete an accredited, formal education program. Most states require physician assistants to pass a certifying exam. In 2001 the 28,820 physician assistants working in doctors' offices and clinics earned a median annual salary of $63,800.

Medical laboratory technologists work under the direction of a pathologist. There are three types of medical laboratory technologists with different levels of training: medical technologists, with four years of specialized training; medical laboratory technicians, with two years training; and medical laboratory assistants, with one year of training. Of these three, only the medical technologist carries out supervisory and administrative duties. In 2001 the median salary for medical technologists was $42,960, while medical laboratory technicians earned an average of $29,520 annually.

Jobs for physicians and other positions in doctors' offices and clinics were generally expected to grow through the 2000s, along with the overall growth in the health care industry and the aging population. Government reforms, however, were expected to address the shortage of medical doctors in primary care by reducing the demand for and income of specialists. Moreover, due to cost controls enforced by HMOs and government programs, physicians' incomes began to level off at the end of the century, curtailing their considerable annual growth rate. Under government reforms, the need for medical support staff such as nurses and medical assistants was expected to increase, while the number of secretaries would be reduced as reforms reduced paperwork and doctors left their individual practices to join HMOs and other group practices.

America and the World

American doctors and health care companies faced an expanding market for their services outside the United States—in places such as Western Europe, Mexico, and Japan—where aging populations grew. In addition, these countries began developing HMO services for non-staterun care.

In order for foreign doctors to practice medicine in the United States, they had to be licensed in the United States. Given that American doctors earned more than their foreign counterparts—in 1990, German doctors earned $120,000 a year; Japanese doctors earned $78,000; and British doctors earned $65,000—practicing medicine in the United States was highly desirable for foreigners entering this profession. As a result, however, of an influential study by the U.S. Department of Health and Human Services, which predicted a large surplus of doctors by the end of the century, the U.S. government passed legislation in 1976 restricting foreign doctors from practicing in the United States. The laws prohibited foreign doctors who had completed their residency programs in the United States from practicing in the United States for two years after obtaining their degrees.

The laws restricting the practices of foreign doctors in the United States had a strong impact on Canadian doctors in particular. Prior to these laws, Canadian doctors could easily obtain five-year permits using their Canadian credentials. The 1976 laws required Canadian doctors to have a full-time resident's green card if they wanted to practice in the United States. The card was often difficult to acquire, though, and greatly reduced the number of Canadian doctors working in the country.

Research and Technology

Upon entering the twenty-first century, new technology fueled the shift from inpatient hospital care to outpatient surgical clinics. Technologies, such as laser surgery, decreased the invasiveness of many medical procedures, allowing them to be performed in outpatient facilities. Technological advances also decreased complications related to the administering of anesthesia, which often required overnight hospitalization.

The trend away from prolonged hospitalization also gave rise to the development of in-home monitoring devices. These devices were used by patients who left hospitals for financial reasons but who also had conditions requiring observation, such as congestive heart failure. The monitoring devices electronically linked the patient's home and a doctor's office or health care agency.

Advances in information technology were slowly used in this industry, particularly by self-employed doctors but became important to the operation of these establishments by the 1990s. In order to reduce office paperwork and maintain more accurate patient records, doctors started using desktop systems for such routine functions as accessing patients' medical histories and insurance records and placing prescriptions with pharmacists.

Doctors also began using information technology to assist them in making diagnoses. Computers provided doctors with sorted information and success ratios on treatments and procedures. This type of information was especially valuable to doctors who needed data on rare diseases and conditions. Researchers in this area were continuing to develop software able to handle the massive amounts of information required by doctors.

Further Reading

"Bleak Outlook: Physician Executives Nationwide Reconsider Medicare Participation." Modern Physician, 1 January 2003.

Donohue, Maureen. "Physicians Must Prepare for Move Toward Internet-Based Health Care." Family Practice News, 15 January 2001.

Guglielmo, Wayne. "Medicare Cuts: Will Patients Pay the Price?" Medical Economics, 10 January 2003.

Kraft, Stephen. "Physician Practice Management Companies: A Failed Concept." [book excerpt] Physician Executive, March 2002.

Jarman, Max. "Heyday of Physician Practice Management Firms Has Passed." Arizona Republic, 17 January 1999.

"Medical Records: Demand for Electronic Medical Records Soars." Health & Medicine, 17 March 2003.

Scott, Lisa. "Point of Contact." Modern Physician, October 2000.

Talsma, Julia. "How Will the Doctor's Office Evolve in the Digital Age?" Ophthalmology Times, 15 January 2001.

U.S. Bureau of the Census. 2002 Statistical Abstract of the United States: Health and Nutrition, 2002. Available from http://www.census.gov .

U.S. Department of Labor, Bureau of Labor Statistics. 2001 National Occupational Employment and Wage Estimates, 2001. Available from http://www.bls.gov .

"Vital Signs." Family Practice News, 1 September 2000.



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