“As more and more inpatient services come under the bundled payment model, all physician-hospital relationships will continue to see greater and greater intensity,” said Keith E. Chew, senior strategic consultant with McKesson.
During a session at the Becker’s Hospital Review 4th Annual Meeting in Chicago on May 11, Mr. Chew described three ‘intensities’ of physician integration, and some of the benefits (and drawbacks) of each.
1. Low intensity integration. “This is basically what you already have in place,” said Mr. Chew. This category, which encompasses directorships, stipends, service contracts and gain-sharing models, balances minimum risk with minimal financial upside. Mr. Chew highlighted the gain-sharing model, which falls under this category, as an example both of the small financial incentive and a reason why this model may soon become a thing of the past: “Returns often diminish after the first year under this model, and then it falls apart,” he said.
2. Mid-intensity integration.“This is where a hospital and physician practice establish an organization that becomes management company for specific service line,” said Mr. Chew. This model includes co-management service line models, leasing arrangements and acquisitions. Mr. Chew believes this model will become more prevalent because the model provides for hospital management that is focused on both quality and cost.
3. High intensity integration. This is when hospitals and physicians come together to form one organization, explained Mr. Chew. Joint ventures, physician employment, mergers and integrated delivery systems are examples of high intensity integration. Mr. Chew sees this model as having the highest potential to thrive in the current market, but execution is everything: “If you don’t do it properly, in a year or two it all falls apart,” he said.
During a session at the Becker’s Hospital Review 4th Annual Meeting in Chicago on May 11, Mr. Chew described three ‘intensities’ of physician integration, and some of the benefits (and drawbacks) of each.
1. Low intensity integration. “This is basically what you already have in place,” said Mr. Chew. This category, which encompasses directorships, stipends, service contracts and gain-sharing models, balances minimum risk with minimal financial upside. Mr. Chew highlighted the gain-sharing model, which falls under this category, as an example both of the small financial incentive and a reason why this model may soon become a thing of the past: “Returns often diminish after the first year under this model, and then it falls apart,” he said.
2. Mid-intensity integration.“This is where a hospital and physician practice establish an organization that becomes management company for specific service line,” said Mr. Chew. This model includes co-management service line models, leasing arrangements and acquisitions. Mr. Chew believes this model will become more prevalent because the model provides for hospital management that is focused on both quality and cost.
3. High intensity integration. This is when hospitals and physicians come together to form one organization, explained Mr. Chew. Joint ventures, physician employment, mergers and integrated delivery systems are examples of high intensity integration. Mr. Chew sees this model as having the highest potential to thrive in the current market, but execution is everything: “If you don’t do it properly, in a year or two it all falls apart,” he said.