Physicians generally prefer autonomy in the way their run their practices and organizations, but aligning with hospitals and health systems is almost a must in today's healthcare environment. However, physicians have more options at their disposal than only hospital employment.
At the 11th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference in Chicago on June 14, Christian Ellison, vice president of Health Inventures, outlined five specific scenarios where physicians could both remain autonomous but also align closer with health systems.
1. Joint venture management services organization. In a joint venture MSO, physicians generally have a 50 percent ownership stake, while the hospital owns 30 percent and a third party owns 20 percent. Similar to foundation models in California, this alignment strategy "can be a precursor to further integration" if that's ultimately what physicians want, Mr. Ellison said.
2. Joint venture. In a regular joint venture, which is common in ambulatory surgery centers, each physician has his or her own ownership stake, as does the physician group and hospital. Mr. Ellison said the key features of this option are that each partner retains his or her independence, but incentives are still aligned through economic interests.
3. Clinical co-management. Physicians who want a clinical co-management will create a limited liability company with the hospital. Physicians will manage a certain hospital line, and it is based on a short-term contract signed by both parties. "The good part of [having a short-term contract] is it's short, and you can get out if need be," Mr. Ellison said. "The bad part, either party can change the rules of the game."
4. Professional services agreement. PSAs function like an employed relationship, but the physician group or ASC is still independent from the hospital. Physicians provide services to the hospital and are paid on a productivity basis, and hospitals bill for those services at higher provider-based rates, he said.
5. Joint venture physician services organization. This is a variation of a joint venture MSO, Mr. Ellison said. Physicians and the hospital share financial risk, and a joint venture PSO "is a precursor to ACO formation," he said.
At the 11th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference in Chicago on June 14, Christian Ellison, vice president of Health Inventures, outlined five specific scenarios where physicians could both remain autonomous but also align closer with health systems.
1. Joint venture management services organization. In a joint venture MSO, physicians generally have a 50 percent ownership stake, while the hospital owns 30 percent and a third party owns 20 percent. Similar to foundation models in California, this alignment strategy "can be a precursor to further integration" if that's ultimately what physicians want, Mr. Ellison said.
2. Joint venture. In a regular joint venture, which is common in ambulatory surgery centers, each physician has his or her own ownership stake, as does the physician group and hospital. Mr. Ellison said the key features of this option are that each partner retains his or her independence, but incentives are still aligned through economic interests.
3. Clinical co-management. Physicians who want a clinical co-management will create a limited liability company with the hospital. Physicians will manage a certain hospital line, and it is based on a short-term contract signed by both parties. "The good part of [having a short-term contract] is it's short, and you can get out if need be," Mr. Ellison said. "The bad part, either party can change the rules of the game."
4. Professional services agreement. PSAs function like an employed relationship, but the physician group or ASC is still independent from the hospital. Physicians provide services to the hospital and are paid on a productivity basis, and hospitals bill for those services at higher provider-based rates, he said.
5. Joint venture physician services organization. This is a variation of a joint venture MSO, Mr. Ellison said. Physicians and the hospital share financial risk, and a joint venture PSO "is a precursor to ACO formation," he said.
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