Hospitals and Doctors - Should Hospitals Own Doctors, or Vice Versa, Or Should They Go Their Separate (and Occasionally) Collaborative Ways

Back in the early 1990s, I co-founded the National Association of PHOs . At the time, I thought physician and hospital could collaborate in some magical way to, among other things, create bundled bills for common procedures.

I quickly discovered five things:

1) the high tech, high income specialties were reluctant to collaborate because they were doing just fine on their own, thank you;

2) a natural mutual suspicion exists between the two as to who is going to be King of the Hill;

3) hospitals generally end up running the PHO ( hence, the expression, “Big H,” little “P”);

4) health plans prefer to negotiate with hospitals and doctors separately;

5) as long as doctors can afford to remain, autonomous, they will..

Fast forward 15 years, and things have changed.

• Doctors, primary care and specialists alike are now approaching hospitals for employment.

• Hospitals and doctors are vigorously competing for high margin ancillary services – joint replacements, heart procedures, CT and MRI imaging services.

• Doctors in various sections of the country are pursuing the “clinic model,” in which physician leaders consider hospitals are considered just another service.

• Multispecialty groups – unable to raise capital to upgrade facilities, fund retirement, recruit and retain physicians,-are turning to hospitals for help and to be merged or acquired.

Now, a whole new spate of hospital physician interactions are evolving to unite doctors and senior leaders. These vary

•from physician employment
•to joint ventures,
•from gainsharing projects
•to creating of centers of excellence,
•and even consideration of the time-honored tradition of the clinic model.

What should be is the ideal relationship? I don’t know. The relationship varies enormously from one region and from one hospital and from one physician to another. It doesn’t lend itself to facile explanations. Many guess is that most hospitals and doctors will run an parallel tracks as long as they can, unless market conditions force them to converge.