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Hospital — Physician Relationship. Factors Causing Tumult and Turmoit Challenge of Competition Symbiotic Increasing Regulatory Complexity. Purpose of Presentation. Recognize Strategy and Tactics of Each Side Identify Collaborative Solutions Failing That — Identify Competitive Responses. - PowerPoint PPT Presentation
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Hospital — Physician Relationship
Hospital — Physician Relationship
Factors Causing Tumult and Turmoit
• Challenge of Competition
• Symbiotic
• Increasing Regulatory Complexity
Purpose of PresentationPurpose of Presentation
Recognize Strategy and Tactics of Each Side
Identify Collaborative Solutions Failing That — Identify Competitive
Responses
HistoricallyCottage Industry Characterized by High
Utilization and Profits
HistoricallyCottage Industry Characterized by High
Utilization and Profits
High Margins
Full Bed
s
Long Stays
Doctors’ Workshop
Health Care “Boss”
Focused on Care
Unlimited Resources
Limited Paperwork
Little Regulatory Managed Care Interference
High Income/Community Status
HOSPITALS PHYSICIANS
Tightening ViseTightening Vise
Rising Costs Employer
Rebellion Best Care /
Worst Care / Highest Cost
Governmental Response
ImpactImpact
Hospitals — Eliminated Beds; Shorten Length of Stay
Physicians — Taking Managed Care Med School Applicants Declined Focus on Outpatient Care Both — Competing for Limited $$
Current ConsiderationsCurrent Considerations
Respond to Compliance / Reimbursement Pressure
Focus on Developing IT
Assure Staff Loyalty
Develop Strategies for Integration
Fight Declining Compensation/Status
Deal with Managed Care Hassle
Contemplate Redistribution of Power/Income
Find Some Friends
HOSPITALS MUST PHYSICIANS MUST
Hospital ActionsHospital Actions
Medical Director / Staff Leadership Agreements
Coverage Agreements Management Agreements Exclusive Provider Agreements Employment Agreements Independent Contractor Agreements Recruiting Incentives Gain-Sharing Agreements Form PHOs
Physician ReactionPhysician Reaction
ASCs Specialty Hospitals Diagnostic Facilities Rehab Facilities In-Office Ancillaries Inpatient Procedures Ceased Medical Staff Volunteerism IPAs and Group Mergers
Ohio Health ExampleOhio Health Example
Orthopedic Hospital Created System — Duty to Protect / Preserve
Charitable Mission
• Fiduciary Duty of Trustees
• Profitable Services Offset Charity Care
• Physicians “Skimming” Profitable Procedures
• Ensure Privileging Supported Mission Went Public
New RealityNew Reality
Requiring Disclosure of Financial Interests
Disqualifying Doctors from Leadership
Restricting Staff Membership / Voting
Recruiting Competing Doctors
Declining Assistance to Competing Groups
Refusing to Deal with Competitors
Entering Exclusive Contracts
Frantically / Creatively Seeking $$
Searching for Security / Control
Looking for Leverage
PHYSICIANS ARE HOSPITALS ARE
Legal Parameters Supporting Competitive
Efforts
Legal Parameters Supporting Competitive
Efforts Community Service Obligations —
501(c)(3) Fiduciary Duty Conflict of Interest Policy Corporate Authority of Board to
Govern
Legal Parameters Limiting Competitive Efforts
Legal Parameters Limiting Competitive Efforts
Anti-Trust
• Illegal tying arrangements
• Exclusive dealing
• Group boycotts
• Attempted monopolization
• Monopolistic leveraging Private Cause of Action State Unfair Competition Laws
Legal Parameters — Limiting Competitive
Efforts
Legal Parameters — Limiting Competitive
Efforts Medical Staff Bylaws
• State law requirements
• HCQIA
• JCAHO
• Medical Staff Bylaws Vs. Right to Make Management
Decisions
Legal Parameters — Limiting Competitive
Efforts
Legal Parameters — Limiting Competitive
Efforts Contracts
• Covenant Not to Compete Bylaws
• Corporate
• Medical Stark II Anti-Kickback Statute
Managing the Competitive Environment
Managing the Competitive Environment
Collaboration vs. Competition
• Still a Symbiotic Relationship
• Remember the Mission Strategy First Escalating Tactics
Community Awareness Campaign
Community Awareness Campaign
Explain Corporate and Tax Structure Discuss the Mission Work on Relationships
CollaborationCollaboration
Join the “Flotilla”
• Set Common Goals
• Respect Physicians’ Expertise
• Motivate by Vision / Alignment of Goals
• Shared Vision and Goals
• Respect Independent Goals and Action
• Direction Determined Issue by Issue
• Partnership When Goals / Visions Align
Collaborative ToolsCollaborative Tools
Joint Ventures Exclusive Contracts Employment Independent Contractor Medical Director / Staff Leadership
Positions Management Agreements Coverage Agreements Recruiting Assistance Malpractice Subsidies
Confrontational OptionsConfrontational Options
Tighten Conflict of Interest Policies Recruit Doctors to Compete Enter Exclusive Managed Care Contracts Leverage Patient Steerage Refuse to Contract or Require Additional
Terms Engage in “Economic Credentialing”
• Amend Bylaws
• Close Department / Exclusive Contracts
• Limit Privileges
Land Use Restrictions
Build an ArkBuild an Ark
Refuse to Deal with Competitors Decline Assistance
to Competitors Invite “Friends”
on Board Shut the Door
Evaluating the Appropriate Response
Evaluating the Appropriate Response
Designate a Planning / Review Body
• Board Members
• Community Leaders
• Key Loyal Physicians
• Administrators
Key Points of AnalysisKey Points of Analysis
Existing Providers in Market Needs Assessment Nature of Competition ID Friends — Secure Them Analyze Impact of Competition ID Physicians’ Motivations
Solicit InputSolicit Input
Physicians with Competing Interests Medical Leadership Community Leaders
Board’s DecisionBoard’s Decision
Form a Flotilla Build an Ark Go to War
Jeffrey O. Ellis, J.D.Lathrop & Gage L.C.
10851 Mastin BoulevardOverland Park Kansas 66210-2007
Jeffrey O. Ellis, J.D.Lathrop & Gage L.C.
10851 Mastin BoulevardOverland Park Kansas 66210-2007
