Ride along with Mark as he discusses how nothing is official unless it's in writing.
Category: Exclusive Contracts
What does China’s foreign policy have to do with hospital financial support? More than you’d think.
If you attended my recent webinar, The Impending Death of Hospitals, you know that I firmly believe that healthcare delivery is shifting away from hospitals and their aligned physicians. In fact, the prognosis for hospitals, at least as we know them today, is guarded.
As another guidepost in this transformation, Tenet Healthcare Corporation just announced (on June 16, 2015) the completion of a joint venture that will combine its ambulatory and imaging centers with those of United Surgical Partners International. The venture will do business under the USPI brand through its now combined 249 ambulatory surgery centers, 18 short-stay surgical hospitals and 20 imaging centers.
Tenet will be the majority owner of the USPI venture and has rights to become the sole owner over time.
Analysis
I see this as a major hedge by Tenet against the financial and technological trends that are likely to ravage the hospital industry in the very near future. As cases move out of high cost, one size fits none facilities to freestanding, more efficient locales, hospitals will no longer serve as the hub of healthcare delivery. Like dormant rose bushes, they will be pared down to their bare minimum.
Physicians and physician groups of all sorts must engage in similar sorts of hedge strategies to increase the chances of remaining relevant in the changing healthcare market.
For more information, acquire a copy of the The Impending Death of Hospitals webinar recording available on my Webinars page or contact me to schedule a consultation.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss
Many medical group leaders are afraid of what the future may bring. They see growing hospital-centricity. They see national groups. They see commoditization.
What good is an exclusive contract if the facility demands that it become non-exclusive?
Hospital based medical groups are often faced with a choice upon exclusive contract renewal: The expectation or demand on the part of the hospital that the group must provide its services, perhaps even at a higher level of intensity, for lower or no stipend support.
Only slightly tongue in cheek, Einstein’s theory of relativity, E=MC², is also the formula that describes the power of any medical specialty exclusive contract.
Hiring for skill is not even half the battle for your group – the price of admission.
Fear of rising healthcare costs is being used to attack exclusive anesthesia agreements. Similar arguments can be used to attack other service department agreements: exclusive radiology agreements, exclusive pathology agreements and exclusive emergency medicine agreements.
If a hospital’s demands on your group have markedly changed but the compensation for your services has not kept pace with the market, it’s not only unfair, it’s immoral, that you continue to eat the burden.
