Chapter 3
Does What We Have
Now Actually Work?
e simple answer is probably not. e more complete answer is that the phy-
sician-hospital organization (PHO) or independent provider association (IPA) or
management services organization (MSO) or whatever interim structure that exists
now is probably inadequate for the needs of future contracting adventures. If the
traditional hospital and medical staff structure worked, most hospitals would never
have capitalized these alternative forms of hospital-physician partnerships. e tra-
ditional medical staff did not fulfill the need to be able to contract with the man-
aged care forms emerging in the 1980s and 1990s, and the present partnerships
wont handle the population management
challenges of the present and the near
term. is book will cover these forms, but only because they are part of the reor-
ganization process, and they are not going away soon. ey may not be structured
correctly for the future, but the medical staff is not going to disappear, and neither
are the networks that have been created around them. Figure 3.1 displays the vari-
ous types of physician relationships that a hospital may have to organize in order to
respond to a contracting opportunity (or threat). e typical contracting group is
an IPA or a PHO, but that may only contain part of the medical staff, and it might
Most of the present platforms for contracting will be based on the management of populations
rather than patients. is is a relatively new combination of words that is equivalent in a rela-
tive sense to capitation where the health system is contracted on a global fee basis to supply all
of the health care needs for the defined population under a contract.
18Medical Staff Integration
also include others in the community that are not within the traditional medical
staff. Contracted and employed physicians are always in the contracting group.
Figure 3.2 is a depiction of a “universe” of providers that reflects the challenge
that a hospital might have with delivering care to a patient population when the
basic physician complement is arrayed in a number of different relationships, not
all of them supportive.
How Did We Get Here? How Do We
Get Where We Need to Be?
e typical consultative response is: “It all depends.” ere is no reason to study
why a system exists unless one is a historian or a medical sociologist. e most
notable was Odin W. Anderson,
who taught at the University of Chicago and who
summarized all health care systems as being composed of a system of scientists and
caregivers no matter what the payment modality. Hospitals, in his experience, were
a secondary issue. e scientist component would be equivalent to our notion of
Contracted physicians should be in the group that the hospital uses to contract with outside
payers, but anesthesiologists and radiologists and others might actually elect to be independent
of any contracting efforts even though they depend upon the hospital for their basic patient
Dr. Anderson was a prolific author and student of health care systems around the world. At the
height of his career, he dedicated a portion of each year to live in a different country to study
its health care delivery system at all levels.
Many Contracting Channels
Urgent Care
Medical Staff
Group Practices
Brokers, ACO’s, MCO’s
Figure 3.1 Physicians can contract through many channels.

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