MDNews - Cleveland-Akron-Canton

COVER FEATURE saving, encourages a team-based healthcare approach, as recently recommended by the AMA, which aims at improving quality and reducing costs through coordinated efforts among vertically integrated practitioners." Contractual Agreements Physician practices that enter into a PSA contractual agreement with a hospital are able to strengthen their ties with the hospital while keeping their private practice intact. According to Glessner, these options often provide opportunities to improve the delivery of patient care. They also provide a measure of stability and predictability to a physician's compensation while simultaneously allowing the physician to maintain some autonomy. "Under a PSA, physicians lease a practice to a hospital and agree to provide services to the hospital's patients. The hospital is responsible for all billing and collections and assumes responsibility for the practice's overhead. The physicians are paid on a productivity compensation model, such as a wRVU-based methodology. In exchange, the physicians agree to exclusively provide services at the hospital (absent certain circumstances)," Glessner explains. "A PSA is often accompanied by a comanagement agreement under which the hospital hires the practice to manage and develop a clinical service line. A co-management agreement often encompasses the duties of a medical director agreement and adds certain administrative responsibilities." Other options he offers for consideration are Medicare ACOs and/or private payor shared savings programs. These programs attempt to incentivize coordination of patient care among different providers by allowing participating providers to share in the cost-savings realized by the payor as 10 | Cleveland/Akron/Canton MD NEWS a result of such coordination. "Primary care and many specialist physicians play a vital role in these programs, and practices should seek out hospitals or large physician groups looking for physicians to participate," says Glessner. "The practice's share of the savings is often negotiable and the practice should carefully consider the terms of any offer to participate in such a program." Recruitment, Mergers and Acquisitions Growing a practice through recruitment and mergers/acquisitions of other medical practices seems to be a logical solution — not only to lessen the perphysician cost to practice medicine, but also to gain leverage in negotiating with insurers and suppliers. "As many physicians know, growth is easier said than done," says Haupt. "First, depending on the size of the subject medical community, mergers/acquisitions can raise issues of anti-trust/competition. Therefore, the transaction must be structured properly and an analysis of the competitive effects of the transaction must be fully analyzed to ensure compliance. "Second, there are reasons why there are different groups practicing the same specialty in the same community (autonomy, ego, disparity in work ethic, etc.). Dealing with differences is a delicate and difficult part of bringing groups together. Accordingly, buy-sell agreements, close corporation agreements, and other organizational documents governing the ownership and management of the practice are critical." Finally, Haupt points out how increasingly difficult it is for a private practice to ■ MDNEWS.COM ■ JANUARY/FEBRUARY 2014 recruit physicians in light of the monies that hospitals can offer and the skepticism of new physicians about the long term viability of private practice. "To attract quality recruits, physicians need to pay a premium or offer benefits and ownership paths that are better than what was available when they were coming out of medical school." While some private practitioners might be considering concierge medicine to increase their income, Haupt does not recommend it. He says, "With less than 1 percent of all physicians practicing concierge medicine, the test sample upon which others can structure their practice is very small, and the risk of failure is very high." Time Is of the Essence Glessner, Feltes and Haupt all agree that while there are many strategies to consider, private practitioners must hasten the speed in which they examine these options and determine a course of action. "I agree with Joe (Feltes) regarding his reference to a 'foggy crystal ball.' Those of us who have been in the industry for years understand that the only constant regarding integration between physicians and hospitals is change," says Glessner. "Like fee-for-service, traditional practice models are likely on the path to extinction. Clinging onto the status quo no longer is viable long-term strategy," says Feltes. "Neither is the paralyzing effect of hope or despair. Today, more than ever, physicians need to be open to change." "The future of health care is here," says Haupt. "If the private practitioner is to survive — and succeed — the time to act is now." ■

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