When Employment is Not an Option

Despite a flood of cardiologists entering into employment arrangements with hospitals and health systems, not all are following suit. We continue to work with a number of cardiology groups that are not interested in or eligible for employment. Why? The reasons are as disparate as the physician practices. Some cardiologists cannot become employed due to state regulations or because they are part of a multispecialty group. Others simply treasure their independence. Regardless, shrinking reimbursement and crushing cost pressures are pushing more cardiologists in private practice to explore their available options. And when employment is not an option, there are alternative arrangements that offer similar benefits while preserving physician independence.

Professional Services Agreement

A Professional Services Agreement (PSA) is an attractive model for physicians who want strong ties with a hospital but are reluctant or restrained from becoming employed. We typically find two common reasons why PSAs are pursued in lieu of employment: (1) cardiologists are already part of a multispecialty group and want to remain in partnership, and/or (2) they continue to practice at multiple organizations and don’t want to play favorites.PSA Model

Comanagement

Comanagement represents a slightly less integrated model for physicians, but it still provides a strong bond between physicians and their affiliated hospital. These arrangements can span multiple physician groups, including those in solo practice. However, they get a bit tricky when a large number of independent practitioners are involved.comanagement model

Service Line Leadership

A service line leadership model is the simplest of the nonemployment approaches but is also rather thin on alignment. Even so, there are a number of physician groups drawn to this option because it is often less time-intensive than comanagement yet still gives physicians a voice in management.service line leadership model

You Have Options

While employment often represents the simplest approach to alignment, there are a number of physician groups that are pursuing alternative models and achieving clinical and financial success. To find the right-fit alignment option, physician groups need to work closely with their affiliated hospitals (and, in many cases, their physician partners) to determine the type of structure that will best address the needs and future of the practice.

This post is adapted from a column that originally appeared in the July 2014 issue of CardioSource WorldNews, a publication of the American College of Cardiology.

This entry was posted in Cardiology, Hospital-Physician Alignment, Physician Employment, Physician Strategy and tagged , , , , , by Katy Reed. Bookmark the permalink.

About Katy Reed

In her practice, Katy focuses on the areas of strategic planning, hospital/physician alignment, transaction assistance, and service line development. She has expertise in cardiology and oncology services and has worked with a variety of clients on their service line and programmatic needs. Most recently, Katy facilitated several hospital/physician transactions, including the acquisition and integration of multiple specialty groups and their associated ancillary services (e.g., infusion therapy) into a large medical center. She has substantial experience developing alignment models, designing funds flow and governance structures, conducting fair market value assessments, evaluating provider-based conversions, supporting physician practice valuations, facilitating hospital/physician negotiations, and providing ongoing integration assistance. Katy holds a master of business administration degree from the University of Washington Michael G. Foster School of Business and a bachelor of science degree in biology from The University of Texas at Austin.

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