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Physician-Hospital Alignment: One Size Doesn't Fit All

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At a session at the 10th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference, Allan Fine, senior vice president and chief strategy and operations officer, The New York Eye and Ear Infirmary; Charles "Chuck" Peck, CEO, Health Inventures; Carole Guinane, Novant Health Ambulatory Care; and Todd Mello, ASA, AVA, MBA, partner, HealthCare Appraisers, discussed hospital-physician alignment in a panel moderated by Scott Becker, JD, CPA, partner, McGuireWooods.

A key theme of the session's discussion was that there is no "one size fits all" model for physician alignment. While employment is certainly growing in popularity, employing physicians "doesn't necessarily mean they're aligned with you," said Ms. Guinane.

Some of the more popular models include employment, professional service arrangements and foundations (which are popular in states with corporate practice of medicine laws), said Mr. Mello.

Mr. Peck agreed, adding that while, in his experience, 60-70 percent of alignment agreements are now employment, "there is plenty of opportunities for other models," including joint venture ambulatory surgery centers and co-management, among others. He also mentioned that hospitals often fall into the habit of using the alignment model that their competitors are using, rather than examining what would truly be the best model for the specific hospital and physicians.

In regards to co-management agreements, Mr. Peck noted that the most successful agreements call for oversight over the entire service line, not just inpatient, outpatient or ancillary services.

The variety of models is an asset to hospitals that are willing to enter into various types of agreements, because they allow them to offer opportunities to the broadest set of physicians. "We are definitely are seeing more doctors wanting to come to the table for some sort of relationship, not necessarily employment." Ms. Guinane.

While there are a variety of reasons behind this push, many physicians are looking for a way increase in compensation relative to what they've been paid historically — something that is less certain in the changing healthcare environment, said Mr. Mello.

The characteristics of each physician group will help guide the best model to use. Mr. Fine is currently working to develop joint venture ASCs with a variety of physicians from various specialties. The joint venture ASC model has been an appealing in the Manhattan market, he said, for those specialties which can perform a high volume of outpatient operations.

For physicians who are weighing various alignment options, they should examine their appetite for risk, years left in career and compensation structure, among other elements of the agreement, said Mr. Fine. He added that despite the movement toward employment, there are a variety of models for physicians to consider. At his hospital, for example, independent physicians have opportunities to remain active in committees to stay aligned with the hospital.

More Articles on Hospital-Physician Alignment:

Hospital Physician Engagement Still High, But Less Than in 2010

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