Physician-Hospital Organizations Case

The Iron triangle for healthcare consists of cost, quality, and access; these three characteristics when balanced create great healthcare. Managed Care Organizations combine the three to offer consumers with care that is appropriate for their individual needs. Our book describes managed care organizations as “the cost management of healthcare services by controlling who the consumer sees and how much the service cost” (Basics of the U.S Healthcare System, Niles). Taking a look at the history prior to the Health Maintenance Organization Act of 1973 (HMO ACT of 1973) the implementation has been significant in balancing cost, and quality control. Before this Act was signed in to law by President Nixon healthcare costs were determined by fee for service. A fee for service or indemnity plan is a plan that allows the provider to determine the cost of service, this fee for service plan caused for healthcare costs to increase rapidly. An example of this would be going to the doctor with neck pain, being told to stretch then receiving a bill for 25,000 dollars. As could be understood the cost of healthcare had became a problem.

The PHO served as a vehicle through which competing hospitals and physicians could bargain collectively with health plans to obtain higher fees for themselves. The owner PHOs, member hospitals, and member physicians canceled contracts with payors and informed them that the PHO would be the sole entity through which they would enter into payor contracts. To contract with the PHO, payors allegedly have had to accept the fixed physician fee schedule and fixed discount of no more than 10 percent off hospital list prices.

1. If doctors and hospitals cooperate to provide better care and lower cost, not to force higher fees from payers, so that the PHO can offer a convincing plan to payers.

Creating a health care reform plan for the U.S. health care system is no easy task. Multiple things must be taken into consideration. These include making insurance affordable, making sure the plan is economically feasible, and creating a plan that will still work in the future. What hindered the reshaping of health care into a sustainable system in the past, are the health sectors interests that prefer the status quo. By continuing to cling on to yesterday’s model, the health care industry is creating its own peril (Schaeffer, 2007).

In order to qualify for Federal safe harbors regarding collective bargaining organizations must demonstrate that physicians' who are part of the organization are clinically or financially integrated with-in the practice in order to achieve cost and/or quality improvements to patient care [3]. They must demonstrate that joint contracting is reasonably necessary to achieve these cost and quality savings [3]. While there are no set limitations, the Practice should also consider their organizations market power in the community of their principle place of business. Lastly, they must consider weather they are exclusive in restricting individual physicians' ability to contract with various payors

Healthcare providers face substantial legal challenges under new the Affordable Care Act. Sweeping reforms have created a demand for healthcare law specialists. As a result, the specialty currently represents the fastest growing law practice in the United States.

The BSA network is a PHO which means it is a for-profit organization that includes a network of hospitals and their medical staff and is created to serve in a contract with managed care plans (Kongstvedt, 2012). This allows them to charge a price for the health-related services the physicians in the network provide the customers. However, based on the antitrust laws, the network is responsible for consulting and negotiating between the physicians and the payers of the network prior to proposing a fee schedule for the consumers (“FTC Bars Texas Physician Group from Joint Price Negotiations,”

Many organizations have attempted to implement several different strategies to accomplish the goals of an ACO. A case study, performed by The Commonwealth Fund, proved Hill Physicians Medical Group to be rather successful in their plan to form an ACO. Hill Physicians collaborated with several hospitals and a commercial health plan (California Public

The medical foundation model is an arrangement in which independent physicians vend their practices to a medical establishment. The physician will then be under a contractual agreement to provide medical treatment services at the foundation’s sites. Under this model, hospitals and health systems are able to create legal nonprofit organizations to directly employ physicians. It also gives physicians more independence and strengthens physician and hospital affairs. Hospital-owned group practices are medical practices that have been contracted under a hospital network. This model can be advantageous because it can improve integration, increase access to care and nurture better relationships with the patient’s physician. Joint ventures are when two businesses create a legal entity to share its profits (Harrison,

The balance between providing high-quality medical care and running a profitable business is a constant battle in the medical community. Thirty years ago, less than two percent of physicians changed jobs during their career. Today, approximately ten percent of physicians change jobs on an annual basis. As physician mobility begins to rise, the medical community’s need to protect its business interest become increasingly necessary. Physician restrictive covenants, or covenant not to compete provisions, have gradually become the prominent tool in order to facilitate that protection. As such, it is important to note and analyze the significant impact that enforcement of these restrictive covenants has not only on the business and the physician individually, but on third parties such as the community and the public at large. This paper will provide a brief outline the history of restrictive covenants, detail the application of those restrictive covenants in the healthcare context, and finally analyze the effects that judicial enforcement of those restrictive covenants has on the physician-patient relationship, the patient’s right to choose, and medically underserved areas.

The demand for cost containment, the growth of purchaser influence, the decline trend in inpatient utilization, and the demands of managed care organizations for efficiency, cost containment, coordination of services, and accountability for service outcomes has changed hospitals strategic planning. Hospitals need to reconfigure and reorganize their health service delivery in order to meet the demands of managed care. To make their organization attractive to the managed care industry, system integration strategies began to emerge such as horizontal and vertical integration (Sultz & Young, 2009, p. 103).

Prepaid Legal Service (PPLS) provide a legislation service that members could receive law service by paying small amount of money on monthly bases. When members have legal issues, PPLS could access them to attorney network to sue or pay related compensation for those who have their own attorney. Therefore, members would feel that someone would back them up, and that’s the greatest value for its customers. Furthermore, they create a “Family plan” which provides a comprehensive protection for a family. Since their target customer is for middle-income Americans, it is widely accepted and the number of membership

This option is flexible, can be set up relatively quickly, and be managed short- or long-term. However, with this type of physician alignment arrangement, hospitals may have limited ability to influence physician behavior, clinical quality, and costs. And despite requiring less capital than a physician acquisition model , this option still demands that the health care organization dedicate enough resources to ongoing monitoring and performance improvement across the network. 2) Employed physician

The growth of Preferred Partner Networks (PPN) in physiotherapy is another market trend that might be relevant as Physio4D defines its monetization strategy. PPNs have existed in multiple forms within the healthcare delivery system and the Ontario Physiotherapist Association has stated (January 2006) that it does not endorse or discourage such contractual relationships among providers8. Most PPNs are initiated by insurers, employers and other third-party payers to access healthcare services at a discounted rate by providing more referrals to partnering clinics. Some preferred provider relationships are established to create a provider pool that can be relied on to accommodate referrals or to allow for priority access. Others are established to create a ready-made referral network8. PPNs are characterized by one or more of the following8,9 -

The corporate practice of medicine doctrine originated in the early days of the United States healthcare system. Physicians worked independently and drove decision making autonomously. With the great improvements in healthcare in the twentieth century came a rise in healthcare costs and disparities in access. As early as the 1920’s, private and government efforts were launched to try and recreate healthcare by applying tested business principles in order to reduce healthcare costs, improve access, and enhance quality. Such considerations of healthcare reform predictably sought new models of healthcare delivery in the form of corporate entities. However, these corporations faced vast resistance and were challenged under the CPOM doctrine.