“Physicians’ desire for autonomy depends on the level of trust they have for the organization,” he says. “They feel better with a certain amount of distance, but the organization can still protect them.” Here, Mr. Bremer explains some aspects of the relationship.
Setting up new entity. The hospital sets up a not-for-profit entity in which the hospital is the sole member. The group retains separate identification and stays at its current site. In most cases, Mr. Bremer says, these organizations are taxable. A hospital could be involved in several of them, one for each of several group practices it acquires.
Advantages to practice. The practice gains the hospital’s managed care negotiating clout, access to the hospital’s infrastructure, such as its EMR system, and, if available, use of the hospital services for back-office billing. Another advantage is close alignment for ventures like ACOs.
Hospital’s powers. The hospital becomes the “sole member” of the organization, giving it ultimate control, Mr. Bremer says. For example, it wouldn’t be able to sell all its assets or go deep into debt without the hospital’s say-so.
Referrals to other hospitals. “The physicians are not technically employed by the not-for-profit hospital,” Mr. Bremer says. They may continue sending patients to competing hospitals, but this is not usually an issue. “Having privileges at two hospitals means driving back and forth, which physicians don’t like to do,” he says.
No hospital subsidies. Keeping an arms-length distance, however, means the group could not receive subsidies from the hospital. “The more autonomy you have, the harder it’s going to be to arrange subsidies,” Mr. Bremer says.
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