Alternative Hospital/Physician Strategies to Create a More Effective and Efficient Community Delivery System

Health Care

August 01, 2007

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Mainstream thinking has been that a clinic must be owned and operated by the hospital in order to qualify as a department of the hospital and, therefore, provider-based reimbursement. However, with a wellstructured professional-services agreement that properly allocates responsibilities for management and employment of nonphysician staff and describes the appropriate areas of integration, both administrative and clinical, together with fair-market-value building and equipment leases, a clinic can retain a reasonable level of independence and still achieve significantly improved financial performance. Such improvement in financial performance does not have to be delivered at the expense of the hospital’s operating margin, as is so often the case with service-line joint ventures. By assessing the requirements, benefits, and costs connected with provider-based reimbursement, hospitals and physicians can pursue truer integration for the community’s benefit while not abdicating a clinic’s independence, which is so important to so many physicians.

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