2 Pitfalls of Physician-Hospital Alignment

Karen Minich-Pourshadi, for HealthLeaders Media , April 16, 2012

"When it comes to compliance with fair market value, we made sure we went to an outside consultant for our incentives and for the medical directorship positions," Ping says. FMV compensation was also an issue with Health Quest's service line institutes for non-employed physicians. "We developed job descriptions for each of the medical directorships and interviewed all of the candidates," and opened participation in these institutes to any physician on staff or who had privileges and appropriate credentials, he says. "Actually, it would be best for patient care if all the doctors in the area are in the institute."

But, I asked Ping, what if everyone physician hits the incentive bonus stretch goal target and receives the
maximum payout?

"That would be great for our patients, but it could be financially challenging. So we planned for it in our business plan. Even if the FMV says the incentive rate should be 15%-25%, if the business model only supports 5%-10%, then we'll go with that," he explains.

For financial leaders working with physician-hospital agreements, Jensen offers a final note ofprudent advice: "Be fair." That's a good way to begin and end any agreement between physicians and hospitals.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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