Co-Management Arrangements: What Are They and Why the Interest Now?

Tags: co-management agreement | co-management arrangement

A co-management arrangement is an organized and formal mechanism to actively engage a group of physicians to achieve greater operational efficiencies and improved patient care outcomes. It is typically focused on one clinical service line, such as orthopedic/rehabilitative surgery or cardiac services. The simplest of these structures involves a hospital contracting with a physician organization, under which the physicians are granted greater input and managerial authority, to design and enforce clinical and operational standards. A more complex structure may involve dual ownership of a management company by both a hospital and physicians. The management company is contracted to manage a service, and it may provide personnel, equipment, supplies, as well as be responsible for establishing and enforcing clinical and operational standards.

There is growing interest in co-management arrangements, as they are a means to involve a large group of medical staff members in processes to promote evidence-based medicine, coordination of care, outcome measurement and reporting, operational efficiencies and other organizational improvement efforts. The traditional medical staff model has been somewhat effective in these areas — thanks to the leadership of some physicians — but it often fails to achieve the desired level of commitment from a broad base of physicians.

Co-management arrangements are seen as a way to change this, at least in very specific clinical areas. Co-management arrangements are a stepping stone to more expansive relationships, without resorting to physician employment, practice acquisition or other such intrusive endeavors. They permit a hospital and physicians to work through issues on a small-scale, learning and perfecting a model that can serve as a template for an accountable care organization (“ACO”) or as the foundation for a bundled payment arrangement.

There are many issues associated with setting up a co-management structure, including identifying duties and responsibilities for governance, management and decision making, as well as establishing performance standards and reasonable compensation for services.

Decisions must be made as to eligibility standards for physician participation and on the co-management entity’s corporate structure. The diagram below illustrates the six major steps involved in the formation of a co-management arrangement.

Outside, objective expertise and facilitation will aid in proactively identifying relevant issues, help the parties work through them, and speed-up the formation process.




For more information on designing and implementing co-management arrangements, please contact Steve Nahm or Jennifer Lee at 310-320-3990 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

© Copyright ASC COMMUNICATIONS 2011. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.