Physi­cians on board

Co-man­age­ment ar­range­ments be­tween hos­pi­tals and doc­tors grow as an al­ter­na­tive to joint ven­tures, but ques­tions re­main over whether the deals can de­liver on their prom­ises

Modern Healthcare - - Special Report -

An ef­fort to curb sur­gi­cal in­fec­tions at the largest hos­pi­tal in Tuc­son, Ariz., re­cently raised an awk­ward propo­si­tion: re­quir­ing nasal swabs for doc­tors at the Tuc­son Orthopaedic In­sti­tute.

Swabs de­tect bac­te­ria that can cause harm­ful com­pli­ca­tions, pneu­mo­nia or blood­stream in­fec­tions, which can be treated with an an­tibi­otic. Screen­ing doc­tors made sense to clinic and hos­pi­tal man­agers as they con­sid­ered ways to re­duce avoid­able in­fec­tions, but pre­sented the some­what un­com­fort­able ques­tion of en­force­ment.

“Can you imag­ine?” says Greg Wa­ters, CEO of the Tuc­son Orthopaedic In­sti­tute, of the un­ease among those left to po­lice the pol­icy among highly in­de­pen­dent sur­geons.

But as it turns out, sur­geons them­selves would han­dle the job un­der a man­age­ment con­tract with 555-bed Tuc­son Med­i­cal Cen­ter. The or­tho­pe­dic group re­ceives hourly fees for man­age­ment, plus ad­di­tional pay­outs tied to qual­ity and ef­fi­ciency goals, giv­ing its 38 doc­tors an in­cen­tive to prod one an­other to com­ply, he says.

In­deed, Wa­ters notes it was a doc­tor who pro­posed the swabs and dis­cus­sions are un­der way to adopt the qual­ity-im­prove­ment strat­egy, which would put sur­geons on the spot to re­mind one an­other “You’re part of the team,” Wa­ters says. “This is what we have to do. Give us your nose.”

Such con­tracts, known as co-man­age­ment agree­ments, have emerged in re­cent years as an al­ter­na­tive to joint ven­tures or em­ploy­ment for hos­pi­tals and doc­tors ea­ger to reach deals to bol­ster ef­fi­ciency and qual­ity of care, health­care lawyers and ex­ec­u­tives say.

The ar­range­ments—un­der which hos­pi­tals con­tract with man­age­ment com­pa­nies jointly owned with doc­tors or wholly owned by doc­tors—may grow more pop­u­lar since reg­u­la­tors fur­ther tight­ened the Stark anti-kick­back law last Oc­to­ber and health re­form in­creases pres­sure to bol­ster ef­fi­ciency, ex­ec­u­tives say.

But an ex­pert on hos­pi­tal and physi­cian re­la­tion­ships warns there is scant re­search to show such deals are suc­cess­ful at curb­ing waste and im­prov­ing qual­ity, and lawyers say deals still risk run­ning afoul of bans on physi­cian self-re­fer­ral.

Pro­po­nents say the ar­range­ments al­low doc­tors who don’t seek to be­come hos­pi­tal em­ploy­ees to work more closely with the hos­pi­tals to im­prove qual­ity and ef­fi­ciency by giv­ing physi­cians the author­ity to make changes in their work and op­er­a­tions.

The struc­ture of the deals may vary, but all fall short of joint own­er­ship of build­ings, equip­ment or ser­vice lines that char­ac­ter­ize a joint ven­ture.

Sally Nel­son, CEO of Huntsville (Texas) Me­mo­rial Hos­pi­tal, says height­ened scru­tiny of joint ven­tures prompted the 88-bed hos­pi­tal to opt for co-man­age­ment of its out­pa­tient surgery and imag­ing ser­vices. Nel­son says she hopes to ex­pand man­age­ment to Huntsville Me­mo­rial’s in­pa­tient ser­vices as well as seek in­creas­ingly am­bi­tious qual­ity and ef­fi­ciency goals. “The first year you have to take baby steps,” she says of the year-old con­tract’s qual­ity and ef­fi­ciency in­cen­tives. “They will grow more so­phis­ti­cated and will have to stretch more to get the goals.”

Thirty-five doc­tors own the co-man­age­ment com­pany, HMH Clin­i­cal Man­age­ment, and two pri­mary-care and two spe­cialty-care physi­cians sit on its gov­ern­ing board.

The Tuc­son Orthopaedic In­sti­tute owns 45% of the co-man­age­ment com­pany cre­ated in July 2008 with the Tuc­son Med­i­cal Cen­ter, which owns a 32.5% stake and the Cen­ter for Neu­ro­sciences, which owns 22.5%. The gov­ern­ing board in­cludes four mem­bers from the or­tho­pe­dic group, three mem­bers from the hos­pi­tal and the fi­nal two seats are held by the Cen­ter for Neu­ro­sciences.

Stu­art Katz, the co-man­age­ment ad­min­is­tra­tor at TMC Or­tho­pe­dic and Neu­ro­science Man­age­ment on be­half of the Tuc­son Or­tho­pe­dic In­sti­tute, says the con­tract, which in­cludes

Co-man­age­ment ar­range­ments are be­ing touted as a way that physi­cians can help im­prove both op­er­a­tional ef­fi­ciency and qual­ity of care.

Upa­maka: Deal led to more author­ity and com­pen­sa­tion.

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