With most physician-hospital organizations losing money, the best relationships hospitals can foster with physician groups are virtual partnerships, says Charles Peck, M.D., director of physician and managed-care services of Atlanta-based accounting company Arthur Andersen.
"Physicians don't have to be owned," Peck says. "Through risk sharing or physician gain sharing . . . physicians can still have a tight alliance with the hospital."
Peck will be discussing his PHO strategies at the HFMA session titled "Hospital/Physician Relationships-Aligning Incentives" on Tuesday, June 30, at 9 a.m.
His biggest piece of advice to healthcare executives: "Don't buy physician practices. I haven't seen one acquisition model that worked. Any hospital that buys physician practices doesn't know how physicians think. They're very independent and entrepreneurial."
Instead, hospitals must learn to share the governance of organizations with the physicians, he says. "Allow physicians input into (organizational) decisionmaking and complete autonomy over clinical decisionmaking."
Peck also offers advice for hospitals on how to fix hospital-owned physician practices. Mainly, the hospital should help the physicians buy back some of what the hospital purchased so they can become independent again.
"Physicians know they need hospitals, but hospitals will have to give up control to gain control," he says.
Peck received much of his insight from personal experience. From 1978 to 1995 he practiced with a 150-member medical group affiliated with University Hospitals of Cleveland, the academic teaching facility of Case Western Reserve University Medical School. He ran the group from 1993 to 1995.
"The year I entered the practice was the year the medical group bought their building back from the academic medical center and became financially independent," Peck says. "Although not legally bound or tied, (the medical group) referred patients to only that hospital anyway."