Calif. Hospital Group Proposes Forming Foundation to Pool Physicians

Tags: California | foundation | phyicians

In a sign of accelerating efforts by hospitals to align themselves with physicians, a California hospital association is floating the idea of forming a joint foundation to supply its hospital members with physicians, according to a report by the Wall Street Journal.

In California, hospitals are not allowed to directly employ physicians. In other states, this is one way hospitals have begun tying physicians more closely to their organization and aligning goals. The California proposal provides an alternative to outright physician employment, but it has raised concerns about added costs and reduced competition for physician services in the region.

The proposal, by the Hospital Association of Southern California, would create an independent nonprofit foundation, not controlled by the hospital group, that would own clinics and centralize administrative functions like billing and electronic health records for member physicians, according to the Journal report. Initially, small and medium-sized hospitals would be most likely to participate, and the goal would be to include 60 physicians that might eventually grow to several hundred.

According to the Journal report, the foundation would contract with physician groups that would be affiliated with individual hospitals. Hospitals, however, would be expected to allow other physicians not involved in the foundation to have privileges at their facilities too. The aim is to help hospitals that have trouble recruiting physicians and that might not otherwise have the resources to form their own foundations.

The hospital association, which includes most of the hospitals in the Los Angeles area, has not yet voted to go ahead with the plan, according to the report. Among the outstanding questions are how the foundation and its hospitals would negotiate prices with insurers, according to the report. Jim Barber, CEO of the hospital association, told the Journal that at least initially, payor negotiations would remain decentralized but that the foundation could advise physicians about their contract negotiations.

Read the Wall Street Journal report on physician pooling in California.

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