GI-Focused Joint Ventures - Why They Can Make Sense for Hospitals

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At the Becker's Hospital Review Annual Meeting in Chicago on May 10, John Poisson, executive vice president and strategic partnerships officer of Physicians Endoscopy, and Adam Henick, senior vice president of ambulatory care at Continuum Health Partners, discussed the strategic value of a gastroenterology joint venture for hospitals. GI-focused joint ventures develop physician alignment, recapture a shrinking service line and create a high quality and cost effective strategy.

Mr. Poisson began by providing background on gastroenterology. GI drives 25 percent of the ambulatory surgery center market, which is growing. Gastroenterology is a relatively small specialty; roughly only 225 new fellows enter the field each year. In 2012, 50 percent of gastroenterologists migrated to hospital employment. By 2015, an estimated 65 percent will shift to hospital employment. From the hospital perspective, this trend represents payor mix erosion and labor cost increases. "Hospitals must get in the ASC business or form relationships with GI practices," said Mr. Poisson.

One of the wisest joint venture models is built around a hospital having a minority interest in the GI center and a focus on clinical integration. Patient medical records should be accessible at both the hospital and ASC. The hospital should provide its affiliated ASC with ancillary services. Within this model, an ASC director should be a hospital employee and ASC physicians should have active privileges at the hospital. A clinical nurse liaison should be assigned to coordinate pre- and postoperative care and record outcomes. The ASC will adopt hospital practice guidelines, including measuring quality assurance and improvement through hospital processes.

Mr. Henick explained that joint ventures make sense because they are a cost effective methodology of physician partnerships. Physicians, hospitals and a management company all become aligned. A joint venture is an excellent opportunity to function as a beta site for initial demonstration of clinical integration strategies. GI procedures, such as a colonoscopy, are less expensive in an ASC setting than in a hospital outpatient department, yet ASCs can maintain the same quality level as a hospital. "An ASC joint venture is an optimal location to begin clinical integration in a healthcare system," said Mr. Henick.

As gastroenterology begins to migrate from the hospital setting to the ASC, GI physicians have begun to change. Whether from unease due to the upheaval of healthcare reform or a desire for a lifestyle allowing more free time, gastroenterologists are shifting away from private practice. Hospitals now have the opportunity to regain a valuable service line in a high quality, cost effective setting, while building a physician alignment strategy designed for the future of clinical integration.

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