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Hospitals Should Think Outside the Box When Employing Physicians

Posted in Practice Management

Over the last several years, hospitals have been acquiring specialty physician practices in response to a number of market forces.  However, these types of acquisitions are not new to the American health care system and those who have been around long enough know that these arrangements can and badly.  In my experience, one of the primary reasons that these combinations fail is that traditional hospital/physician practice acquisition/employment transactions tend to focus on short-term concerns and protections and as a result fail to build a strong foundation for a long-term successful relationship.  Under a typical acquisition/employment model, the physician is engaged for the sole purpose of providing clinical services and is insulated from input into the management and operations of the post-acquisition practice.  This has the effect of removing the physician from one of the key areas where they can provide significant value:  participation in operational cost savings.   

I have long been of the mind that physicians are in the best position to control healthcare costs since they are the key decision-makers when it comes to any given course of treatment.  Any model which insulates physicians from participation in practice management is unlikely to experience any meaningful cost savings in the long run.  If you are a hospital acquiring medical practices or a physician contemplating selling it to a hospital, consider that both hospitals and physicians must seek to move beyond traditional models built upon an us-against-them mentality to one which capitalizes on the strengths of both parties to the relationship.  Hospitals interested in being in the physician business for any meaningful length of time should seek to develop an organizational structure that fosters an ownership mentality and a commitment to achieving collaborative organizational goals. 

  • http://www.pamedsoc.org Gus Geraci, MD

    I agree wholeheartedly, having lived through and in the acquisitions of the 80\’s. However, some physicians do not want to lead, and those that do or want to often need training to understand the fine points of administration in large oganizations and how to speak \”business\” to administrators so they listen and how to teach administrators \”clinical speak.\”