Browse by Topic
More than 40,000 members value HFMA's thought leadership and practical strategies. HFMA is where you need to be.
Get acquainted with the
healthcare finance industry's leading professional association. Find out why our
members rely on HFMA as their go-to source for insight and
Members have many
options for helping them advance their careers. Conferences, seminars,
eLearning, certification, and more -- our education and events will keep you
Connect the dots on today's big issues, explore collaborations, get career-boosting tips, and network with colleagues nationwide at the leading finance conference. Save $100 off the full conference rate when you register by May 8.
Real-time presentations with nationally recognized experts, networking opportunities, and industry solutions—no travel required!
Learn about timely healthcare finance topics and earn CPEs. Most live webinars are free for HFMA members and $99 for non-members. View the latest schedule.
If you're a subscriber to any of our three newsletters, you have access to online education. Learn more or subscribe.
Get the perspectives of leading healthcare finance professionals on today's hottest issues.
Information about leading vendors helps your buying decisions.
Forum members can network during live webinars or access a library of past webinars on topics such as bundled payment, charity care, and ICD-10.
An ever-expanding collection of spreadsheets, policies, job
descriptions, checklists, and more that you can adopt and adapt.
Forum members can submit vexing questions to a panel of experts
using our Ask the Expert service.
Your source for employment solutions.
Find new employment opportunities or
reach out to qualified candidates.
Distinguish yourself as a
leader among your peers and advance your career by earning certification in our
healthcare finance programs.
Get an objective third-party evaluation of products and services used in the healthcare finance workplace.
MAP App is a web-based application that helps organizations improve revenue cycle performance based on industry-standard metrics called MAP Keys.
Find suppliers and products in this comprehensive vendor directory for healthcare finance professionals.
Guidance for understanding and communicating about the price of health care.
Transformation toward value-based healthcare is reshaping the delivery of care, patient expectations, and payment structures.
Improve your revenue cycle performance through standard metrics, peer comparison, and successful practices.
Several years ago, the stand-alone Columbus Regional Health (CRH), in Columbus, Ind., faced an interesting dilemma after a flood caused the hospital to close for several months. The leadership team had to choose whether to permanently close the hospital, partner with a larger health system, or look for strategic ways to solidify and grow the hospital’s market presence so as to sustain independence.
CRH’s strong and determined leaders rallied around the last option—ultimately, rolling out a physician co-management approach. They saw co-management as a key strategy to the organization’s future success. The agreement not only increased alignment with critical physicians, but provided a solid foundation for aligning financial and clinical interests between the health system and its physicians, producing a higher value for patients and payers.
To help ensure that physicians meet performance objectives, CRH also launched a gainsharing program for surgical employees, including nurses and technicians. Physicians are not included in this gainsharing program, but they benefit from it. Surgical employees are now more motivated to help physicians meet co-management performance goals, such as ensuring OR start times.
Learn more about the Forums—and subscribe
After several initial planning exercises, the CRH team realized that other health systems were interested in entering CRH’s market via physician acquisitions. To respond to this market threat, CRH pursued a surgical co-management agreement with Genesis Physician Group LLC, a group of 35 independent surgeons, proceduralists, and anesthesiologists.
To ensure the desired systematic impact, the co-management agreement had to be led by physicians and professionally managed. It also needed to span the full continuum of the surgical experience.
To accomplish these goals, CRH took advantage of an ambulatory surgery center joint venture that it had formed in the 1990s with Genesis. The two partners had 50-50 ownership in the Columbus Surgery Center.
CHR purchased the remaining 50 percent ownership interest in the Columbus Surgery Center from Genesis to become the full owner of the surgery center. Then, after completing the purchase, CRH entered into the surgical co-management agreement with Genesis.
The physicians now manage the full spectrum of inpatient and outpatient surgery and endoscopy services at the hospital and ambulatory surgery center. The physician co-managers also oversee the clinical staff within the hospital department.
A steering committee was created with majority physician participation and representatives from the health system’s senior leadership team. This steering committee worked together to structure the agreement and build the cultural pillars of the organization to ensure a sustainable partnership. Jim Bickel, CRH president and CEO, and Michael Dorenbusch, MD, chairman of Genesis Physician Group LLC, were instrumental in pulling the steering committee together. Their sponsorship enabled the committee to work through the big challenges and not allow potential barriers to prevent progress.
The key to making the co-management program a success was to align the incentives for the physicians with the goals of CRH. Accordingly, CRH set goals around clinical outcomes, patient safety, satisfaction, and operational effectiveness.
Under the Stark and anti-kickback laws, any compensation paid for achieving these goals are required to be set at fair market value. In addition, as a not-for-profit hospital, CRH has other restrictions imposed by the Internal Revenue Service. To meet these requirements, CRH engaged the help of outside legal counsel familiar with the implementation of these types of arrangements in not-for-profit hospital settings and an independent consultant to assess fair market value for the services.
Some of the safeguards implemented include:
Physician compensation is primarily based on the time required to provide the services plus a potential share of cost savings. The costs savings are determined based on the cost at a specific hospital (e.g., CRH) versus the cost to provide the same care at comparable hospitals. Comparable hospitals (e.g., local hospitals with similar operating structures) may be defined based on acuity of cases, academic status, cost of living, quality ratings, and other metrics.
A secondary method of assessing fair market compensation is a comparison to other clinical co-management agreements. However, the comparison must include a complete understanding of the services provided and the potential for improvement at the hospitals in which these arrangements are in place.
Around the same time as CRH rolled out the co-management initiative, it also introduced a gainsharing program for all surgical employees (e.g. nurses and technicians). CRH leaders recognized the importance of employee gainsharing to the success of the co-management initiative since nurses, technicians, and other surgical employees greatly impact OR start times, patient satisfaction, and many other metrics that dictate physician performance.
The gainsharing program for surgical department nurses, techs, and other employees allows for 40 percent of the surgery department’s margin (net revenue – direct expenses) to become eligible for distribution to the surgical employees. See the tool below for further description of the program.
Access related tool: Calculations for Employee Gainsharing
The actual gainsharing amount paid out to the surgical employees is based on the percentage of compliance (tiered) with the established clinical performance metrics and protocols. For example, as follows:
The co-management agreement was signed in July 2012. Within the first year, the co-management agreement has already generated very positive results. “The co-management agreement has been great for the physicians and Columbus Regional Health,” says Kurt Ellis, vice president of health system operations. “The physicians have begun to create a new culture in the surgery department, develop a positive environment for the staff and themselves, play a part in controlling their own destiny, and operate in a physician-driven culture that enables them to police themselves.”
Ellis also stressed that the benefits to CRH and patient care have also been positive. Specifically, the co-management agreement generated the following results within the first year:
Given the success of the surgical co-management arrangement, the health system is evaluating expanding the agreement to the emergency department and positioning the organization to take on risk-based contracts through the development of a clinically integrated network.
Ellis outlined the following imperatives for hospitals and physicians who desire to create a successful co-management agreement to ensure positive results:
Commitment of strong physician leadership. Without the leadership and bravery of Michael Dorenbusch, MD, Larry Olson, MD, and Kendall Hadler, MD, the effort would have failed, says Ellis. “Because of the commitment of these physicians to create a surgical environment that promoted high-quality, cost-effective, and optimal patient care we were able to get to where we are today.”
The involvement of people who have gone down this path before. Outside professional advisory firms helped CRH work through the strategic, valuation, and legal issues, which helped ensure an arrangement that fit the local dynamics and was compliant with legal and regulatory guidelines. Several conversations were also held with other health systems that had surgical co-management agreements in place to learn what worked and what didn’t.
Effective communication among physicians, health system leaders, and staff. Effective communication to all stakeholders is key to not only gaining buy-in but to getting valuable insights.
The CRH leadership team recognizes that each market will move from volume to value at its own pace. However, the leadership team knew that it could take incremental steps over time to more effectively chart its own course by thoughtfully focusing on quality and efficiency projects within the current fee-for-service model. No one knows exactly with the future of healthcare brings, but innovative organizations like CRH are embracing the complexity to drive transformation in care delivery.
Dennis Butts is a director, Navigant Consulting Inc’s Provider Strategy Practice.
Curtis Bernstein is a managing director, Altegra Health’s Valuation and Transaction Practice, Denver, CO.
Please share your insights and questions in the comments section below, which will be open for comments through Oct. 11. Alternatively, use the "inshare" button at the top of this web page to share this article and your comments on the CFO Forum’s LinkedIn board.
Publication Date: Friday, September 13, 2013
Brian Kueppers, founder and CEO, Apex, discusses the importance of a robust patient payment strategy in boosting organization revenue and enhancing patient satisfaction.
Brian Grazzini, CFO, HealthPort, describes the importance of efficient and compliant information exchange and audit management in helping HIM staff spend less time on paperwork and more on mission-critical projects.
Cindy Matthews, executive vice president, Community Hospital Corporation, discusses how rural and community hospitals can use collaborative partnering to position for success through tough market conditions.
Rick Heise, senior vice president, revenue cycle, at Cerner Corporation, discusses the importance of integrating clinical and financial data to excel in health care’s changing payment environment.
Dale Hockel, senior vice president of operations, and Jim Fanelli, CFO, TriMedx, share strategies for elevating clinical engineering through innovative management programs.
Russ Graney, founder and CEO for Aidin, and John Laursen, head of business development for Aidin, share insights on how to improve care transitions between acute and post-acute care settings and incentivize high-quality patient outcomes.
Scott Elston, strategic accounts manager, GE Healthcare Services, describes how substantial cost reduction in health care requires rethinking business strategy and asset use.
Robert Williams, MD, director, Deloitte Consulting LLP, and Arielle Freiberger, product strategist, ConvergeHEALTH by Deloitte, explain how sophisticated retrospective, real-time, and predictive data analytics can inform decision making to reduce costs and improve care.
Stuart Hanson, director of business development (healthcare solutions) at Citi Retail Services, discusses how improving the payment experience can benefit consumers and healthcare providers.
Scott Schmidt, vice president, Cerner RevWorks, LLC, shares insights on best practices for maximizing a revenue cycle management partnership.
HFMA's print, email, online, and mobile opportunities provide you maximum reach and impact. We will work with you to build a plan that meets your needs. Contact a sales rep.
HFMA offers online, email, and print opportunities to help you recruit the most talented healthcare finance professionals. Place your classified ads today.
Drive down costs while improving quality in a reform environment.
Stay informed about new directions in healthcare finance. Share tools and strategies for improving performance. Be an active participant in your profession. Together, we’ll reshape the business and practice of healthcare. Join us.
©2015 Copyright Healthcare Financial Management Association
HFMA.org is best viewed using IE9 or the latest versions of Chrome, Firefox, and Safari.
Join HFMA today and enjoy: