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The BayCare Experience: Physician Joint Ventures. Paul R. Summerside, MD Chief Medical Officer BayCare Clinic, LLP President, Board of Managers BayCare Aurora, LLC. Aurora BayCare Medical Center (ABMC). ABMC is an acute care hospital that opened in 2001

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the baycare experience physician joint ventures

The BayCare Experience:Physician Joint Ventures

Paul R. Summerside, MD

Chief Medical Officer

BayCare Clinic, LLP

President, Board of Managers

BayCare Aurora, LLC

aurora baycare medical center abmc
Aurora BayCare Medical Center (ABMC)
  • ABMC is an acute care hospital that opened in 2001
  • Joint Venture of BayCare Clinic (a physician partnership) and Aurora Health Care (a not-for-profit organization)
  • 40% Physician ownership
  • 167 Beds including the following services:

- General Medical and Surgical - Women’s Health

- Adult ICU/eICU - Obstetrics

- Cardiovascular - Level III Neo-natal ICU

- Neuroscience - Pediatric Inpatient

- Orthopedic - Inpatient Rehabilitation

- Emergency Services including a Level II Trauma Center - Oncology

  • Located in Green Bay, Wisconsin
  • 1,100 employees
  • Operates under the Planetree philosophy: patient centered care in a healing environment
baycare history
BayCare History
  • 1996 - Independent Specialty Practices Form MSO
  • 1998 - Letter of Intent w/ AHC
  • 1999 - Integration of MSO to BayCare Clinic
  • 1999 - Finalize JV Operating Agreement
  • 2000 - Break Ground on ABMC Hospital
  • 9/01 - Opening ABMC Tertiary Hospital
  • 2003 - ABMC Reaches Calendar Year Profitability
  • 2004 - ABMC Pays off Operating Line and Accumulates Cash Reserve
  • 2007 - ABMC 5th Consecutive year w/ > 12% margin and begins seventh expansion
joint ventures why
Joint Ventures….Why?
  • Am I in trouble?
  • Am I at risk?
  • Will I be at risk?

Risk Avoidance = 10x Pleasure Pursuit

hospital system anxieties
Hospital System Anxieties
  • Fixed Costs
  • Physician Loyalty
  • Capital Needs
  • Regulatory Concerns
  • Safety/Quality
  • Payor Mix Risk
understanding motivation
Understanding Motivation

Maslow’s Hierarchy of Needs

physician fears needs
Physician Fears/Needs
  • Loss of lifestyle
  • Loss of Control
  • Loss of Colleagues
  • Loss of Respect
hospital finance
Hospital Finance

PROFIT

COST

$ Millions

LOSS

REVENUE

0 Volume

physician finance
Physician Finance

REVENUE

$ Thousands

PROFIT

COST

LOSS

0 Volume

physician
Physician

I Move

I Stay

Risk Corridor

$ Thousands

REVENUE

PROFIT

COST

LOSS

0 Volume

hospital finance fears
Hospital Finance Fears

Ortho Sad

Ortho Happy

PROFIT

RiskCorridor

COST

$ Millions

LOSS

REVENUE

0 Volume

slide13
Clash of Cultural Values

Institutional: Greatest Good for the Greatest Number (Missions)

Physician: My Income, My Overhead,

My Time, My Patients (Goals)

slide14
Physician Fears…

Reliance on benevolent dictatorships

w/ a “Mission”

Psst… remember RESPECT and Control!

slide17
Keys to Successful Join Ventures
  • Key personnel like each other;
  • Understanding partner’s cultural values;
  • Respect of partner’s value;
  • Willingness to relinquish control.

(If you love them, set them free!)

slide18
If you want to be a lion tamer….

you better at least like the animals.

slide19
Aligning Incentives (Fears!)

Hospital System Anxieties

  • Fixed Costs
  • Physician Loyalty
  • Capital
  • Regulatory
  • Safety/Quality
  • Payor Mix Risk
  • Loss of Profitability and Mission
  • Physician Anxieties
    • Loss Lifestyle
    • Loss of Control/Quality
    • Loss of Colleagues
    • Loss of Respect
slide20
BayCare Aurora Experiment
  • Ownership
      • 40% BayCare Physicians
      • 60% Aurora
      • All Stark Controlled Revenues in the JV
  • Governance (MAD) Board
      • Five Aurora and Five BayCare
      • 70% Super Majority Rule
      • Partner Veto all Self-Dealing
      • Non-competition
slide21
BayCare Aurora Experiment
  • Results:
    • BayCare Clinic
      • 1999 – 53 specialists
          • $44 million net collections
      • 2007 – 100 specialists
          • 40 physician extenders
          • $105 million net collections
slide22
BayCare Aurora Experiment
  • BayCare Aurora LLC
      • 1999 – Two Surgery Centers
          • $8 million gross revenues
      • 2007 – Tertiary Hospital System
          • $200 million gross revenues
          • Largest Taxpayer in County
slide24
Patient Satisfaction – Inpatient Services

* Source: Aurora Loyalty Index Data Through Q2 2007

slide25
Patient Satisfaction – Outpatient Ambulatory

* Source: Aurora Loyalty Index Data Through Q2 2007

slide26
“In the Absence of a Great Dream…

Pettiness Prevails.”

--Peter Senge

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