Physician – Hospital Integration: Strong Governance Model Key To Long-Term Success

During the course of an integration negotiation, both hospital executives and physicians focus much of their attention on financial matters, and perhaps rightfully so. However, a strong governance model may be the key to the long-term success of the relationship. Many integrated physicians will often point to governance, and not compensation, as the reason why their arrangement ultimately succeeded or failed. Not surprisingly, most physicians are concerned that they will lose practice autonomy following an integration, so certain aspects of practice operations will often continue to be overseen by the physicians, including schedules, personnel decisions, coordinating time off and administering the physician’s compensation system as permitted by law. In order to advance the strategic goals of integration, physicians should be willing to become involved in certain aspects of hospital service line operations, and hospitals should be willing to engage physicians to become involved, including overseeing and improving clinical operations and efficiencies, developing quality standards, assisting with both budgets and strategic plans, and overseeing other service line functions. This work often leads to the greatest success of any integrated relationship. Therefore, in order to lay the foundation for a successful integrated relationship, both hospitals and physicians should devote time to the creation of a governance model that is able to address and respond to both day-to-day practice issues and operational and strategic service line issues.

  • Joel C. Porter

    Joel is Chair of Maynard Nexsen’s Physician/Hospital Integration team and a member of the Firm's Health Care, Corporate Governance & Compliance, and Mergers & Acquisitions practice groups.

    He represents and advises physician ...


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