|
Hospital survival in
the current environment is dependent upon creating an integrated system
that maintains tax exempt status (for nonprofit hospitals) and provides
incentives to medical staff members to work with the hospital to improve
the quality, accessibility and affordability of services to the hospital
community. A hospital's greatest strength - diverse physician practices -
sometimes presents a challenge in that the hospital does not speak with
one voice and does not have hospital and physician financial incentives
aligned across the entire system. Hospitals that do not employ all their
physicians need an integrating mechanism to compete with those that do.
Increasingly, payors are looking to one stop shopping through a bargaining
unit that can deliver both hospitals and their physicians. As competition
emerges, there is increased pressure for improved performance, lower
costs, and a clear manifestation of ability to take on financial risk
collectively.
Some hospitals are unhappy with their
PHO structures, deeming them cumbersome, perhaps biased toward
specialists, or creating leverage because the hospital does not hold the
managed care contracts, and it cannot take the full burden of the risk
requirements and fund the required infrastructure without putting its tax
exempt status at risk.
Beautyman Alvstad, LLP's Hospital
Economic Profile Plan (HEPP) solves these problems. HEPP is designed to
set aside funds from payor contracts for participating physicians on a
tax-deferred basis to reward performance based on the overall goals and
objectives of clinical process improvement.
Physicians who are accepted into HEPP
upon submission and approval of an application, are eligible for
allocation of funds to individual tax-deferred accounts. Annual
distributions from these accounts to physicians are based on criteria tied
to clinical and system performance. The funding mechanism is structured so
as to protect the hospital's tax exempt status. A physician advisory board
reports to the Hospital Board of Trustees.
More detailed information on the HEPP
program is available
upon request.
|
