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Physician-Hospital Integration in the 21 st Century. Hoyt J. Burdick, MD, FACHE. Physician-Hospital Integration in the 21 st Century. Background and perspectives Economic integration and alignment Employment doesn’t assure engagement Dual track physicians.

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physician hospital integration in the 21 st century1
Physician-Hospital Integration in the 21st Century
  • Background and perspectives
  • Economic integration and alignment
  • Employment doesn’t assure engagement
  • Dual track physicians
physician hospital integration it shouldn t be that difficult
Physician Hospital Integration:It shouldn’t be that difficult

Hospital-Employed Physicians: How Medical Staffs are Coping with the New Reality

Janice Dinner, Esq., Associate General Counsel, Banner Health

Karen Owens, Esq., Partner, Coppersmith Schermer &Brockleman PLC

American Health Lawyers Association 2013 Meeting


PEJ - Physician Executive Journal of Medical Management

May-June 2014

The management of medical care has become too important to leave to doctors,

who, after all, are not managers to begin with.

FORTUNE Magazine, 1970

physician manager leader
Physician – Manager - Leader

Source: Changing Demographics, Competencies and Physician Leadership

Peter Angood, MD, presentation, July 27, 2013

physician hospital relationship what does true alignment mean
Physician-Hospital Relationship: What Does True Alignment Mean?

Be willing to share leadership and work collaboratively with one another

Be willing to deal with each other as true partners

Make changes in our behaviors that get in the way

Clarify what changes in the patient care process are needed

Understand what our patients need from us

Encourage the community to use our local physician and hospital services

peer review
Peer Review

“Review by one’s peers within a hospital is not only time consuming, unpaid work, it is also likely to generate bad feelings and result in unpopularity.”

Scappatura v. Baptist Hospital, Arizona, 1978

Until 1986, physicians performing peer review still faced potential extremely serious federal liability, particularly under the anti-trust laws.

Health Care Quality Improvement Act

- adequate fair hearing

- qualified good faith immunity

employment law
Employment Law

“Hospitals resisted claims that physicians were their employees simply by virtue of being medical staff members.

Most courts found that simple medical staff membership did not equate to an employment relationship because physicians operated with too much autonomy to satisfy legal standards for employment.”

Diggs v. Harris Hosp. Methodist, Inc., 1988

St. Luke’s Health System v. State, 1994

tort law
Tort Law

Under the traditional model, hospitals typically could not be held directly liable for physician negligence.

- Ostensible agency – plaintiff led to believe that the physician was

controlled by the hospital

- Negligent credentialing – hospital failed to adequately credential

or oversee the quality of the physician through the peer review


self governing medical staff1
Self-governing Medical Staff

CMS, in its Conditions for Medicare Participation, requires hospitals to delegate peer review responsibilities to the medical staff (42 C.F.R. 482.12) and these requirements are incorporated into Joint Commission Medical Staff Standards.

- Revisions to Final Rule May 12, 2014

- Hospital Governing body to consult periodically with medical staff

- Enables unified medical staff for multi-hospital systems

physician employment trends
Physician Employment Trends

The Incidental Economist

Contemplating health care with a focus on research,

an eye on reform

Hospitals are employing more physicians: what it means for the rest of us

demise of independent physician practice
Demise of independent physician practice

The changing health care environment, and what it means for health IT

Posted on August 15, 2012 by Robert Rowley

ama principles for physician employment
AMA Principles for Physician Employment
  • Physician’s paramount responsibility to his or her patients (duty to employer - beware of divided loyalty)
  • Free exercise of professional judgment in voting, speaking and advocating for patient care interests, the profession, health care in the community and the independent exercise of medical judgment
  • Patient welfare trumps economic or employer interests
  • Treatment and referral decisions must be based on the best interests of the patient without restrictions/incentives/penalties
  • Medical directors are practicing medicine
ama principles for peer review
AMA Principles for Peer Review
  • All physicians should promote and be subject to an effective program of peer review
  • Identical for all physicians regardless of employment status
  • Conducted independently without interference from any human resource activities of the employer
  • By physician peers – not lay administrators
  • Accorded due process protections for independent exercise of medical judgment
  • No link between employment and medical staff membership or privileges (clean sweep clauses)
dual track
Dual Track

Peer Review

Employer Performance Evaluations

Controlled by contract

Determined by supervisor

Reviewed by HR

Subject to HR policy

May be swift and decisive

Performance information may be reviewed and shared with less protection from discovery

  • Controlled by Bylaws
  • Determined by peers
  • Reviewed by Committee
  • Subject to due process and appeals rights
  • Traditionally slow and methodical
  • Peer review information that is confidential with limited discoverability
sharing information
Sharing Information?
  • Sharing peer review information with hospital administration may jeopardize peer review confidentiality and immunity under state law.
  • Does a CEO/CMO participate in peer review as an administrator or as an employer?
  • Physician rights of confidentiality, due process and contractual rights under bylaws?
  • Medical Staff action vs. Employer action?
physician hospital integration in the 21 st century2
Physician-Hospital Integration in the 21st Century
  • If hospitals employ most physicians over the long term, will the organized medical staff change or even cease to exist?
  • What state and federal regulations would have to be dismantled?
      • CMS conditions of participation that assume a separate medical staff, HCQIA and state codes
  • Will the Joint Commission need to rewrite its medical staff chapter? (again)
physician hospital integration in the 21 st century3
Physician-Hospital Integration in the 21st Century
  • Background and perspectives
  • Economic integration and alignment
  • Employment doesn’t assure engagement
  • Dual track physicians