Support your local hospital—It pays

Rethinking hospital-physician relations can save your contract

Hospital officials are routinely besieged by a marketing blitz from physician staffing firms. Color brochures, pitch letters, and magazine advertising trumpet the same overblown litany—"We can do the job in your emergency department better, cheaper, faster."

Whether true or not, the claims sound like music to a cash-strapped hospital administrator’s ear. If you aren’t careful, someone is likely to steal your provider contract away from you using the same blatant come-ons. But if a hospital is willing to cancel its longstanding agreement with your group to test new waters with an untried staff, you or your medical director may have taken that contract, once signed and delivered, all too easily for granted.

"Keeping your contract requires constant innovation," says L. Scott Larsen, MD, president of Emergency Medical Consultants, a 120-physician practice with 16 hospital contracts based in Livingston, NJ. Following are some suggestions that may prove helpful in keeping the ball rolling:

• Support new projects

Develop new products. Market new regular intervals Make your group seem new and innovative to hospital management, says Larsen. If the hospital is exploring the creation of an observation unit, do the research and provide the physician expertise to staff those units. Encourage management to help finance an urgent care fast track. The development is likely to improve conditions in the emergency department (ED) but also help patients with faster service.

• Use your clinical clout

Larsen offers an example: The market for capitation contracts is spreading nationwide. However, capitation is still largely the primary care provider’s (PCP’s) realm. As a result, PCPs have been reluctant to see patients as often as in the past, particularly for minor, unscheduled office visits. Consequently, EDs have assumed a greater share of the primary-care role.

"Hospitals in heavily capitated markets can be expected to run their EDs at peak performance capacity. This kind of knowledge translates into stronger negotiating clout for physicians," Larsen asserts.

• Take stock of your practice

If another group is claiming they can lower your hospital’s costs, ask yourself why your costs are so high, suggests Gordon W. Josephson, MD, MPH, chief operating officer of Baystate Medical Practices, a century-old multi-specialty group in Springfield, MA.

It could be that your clinicians are needlessly over-prescribing, routinely overstepping the medical director’s edicts, or simply showing up late for work. Self-assessments using claims audits and profiling techniques can help reveal and correct the practice’s inefficiencies.

• Diversify your group

By joining an integrated multi-specialty group, a hospital may be less likely to terminate the contract, says Philip Stoffan, JD, a contract attorney with law firm Lague, Newman and Irish in Muskegon, MI. In fact, the hospital will be significantly less able to cancel the emergency medicine group if the group is part of larger, diversified group practice.

• Strive for an equity stake

Physician groups such as independent practice associations (IPAs) wield enormous contracting power with hospitals. But emergency providers are likely to hold a minority position in the IPA compared with other specialists. As a result, they have little or no voice in setting policies yet control a large part of patient care decisions.

But if the group can achieve an ownership stake in the IPA, the association is more likely to act in the emergency group’s interests, Stoffan says. Also, by participating incentives, such as monetary risk withholds and patient management fees, emergency practitioners are given direct rewards for better management of patient-related costs, which can also benefit the hospital. "In most managed care arrangements, emergency physicians seldom see such incentives." Stoffan adds.