2011: The Current State of Physician Integration

With the cuts in Medicare reimbursement and the unknown status of healthcare reform, many physicians and hospitals are coming up with new ways to form employment relationships and work together.

Hospital Employment has been a trend we have previously discussed, but there are also many alternative ways hospitals and physicians can work together to create a mutually beneficial model that makes sense for both parties financially. Hospitals are being more creative in ways to maintain and develop relationships with their physicians. Many are embracing a variety of strategies, such as employing physicians and acquiring group practices, creating co-management roles for physicians and giving them greater say in governance of the organization.

A recent PricewaterhouseCoopers survey found that 44% of physicians are already employed by some entity, from hospitals to group practices, and 46% are interested in pursuing this model in the next two years. Hospital employment provides a guaranteed salary for a physician and the physician can focus on caring for patients instead of running a practice and worrying about payment and reimbursements. Hospital employment can cover lower reimbursements and also integration and new administrative requirements physician practices are subject to, such as installing electronic medical records.

The PricewaterhouseCoopers survey found that physicians practicing in large groups are 2-3 times more likely to express interest in hospital alignment than solo practitioners.

Hospitals have also implemented Management Services Organizations. The hospital and practices share expenses for functions such as purchasing supplies, practice management services, and some aspects of managed care contracting and electronic health records.
Another model that has been explored and implemented is a Co-Management Arrangement. In a co-management arrangement, a physician or group of physicians is paid to carry out management work for the hospital. The physicians are paid for the cases they handle, but responsibilities can also include administrative tasks like writing up protocols for establishing a physician-integration model.

Co-management and similar payment arrangements are catching on as alternatives to employment. The PricewaterhouseCoopers survey found that 24% of physicians are currently aligned in this model and 51% of physicians are interested in pursuing it over the next two years.
Another model that has been explored is a Governance Model. In a Governance model, the hospital has set up an internal physician committee made up of physicians. The physician members participate in hospital decision-making separate from the hospital medical staff and serve as a joint operating committee.

Hospitals and physicians need to keep an open mind in this quickly changing medical and health care climate. Hospitals need to be flexible and open to different options to attract the best physician candidates and maintain the best quality of care for their patients.

Read the full article at Becker’s Hospital Review or click here:http://www.beckershospitalreview.com/hospital-physician-relationships/physician-employment-a-beyond-the-current-state-of-physician-integration.html