Posts Tagged ‘Physician-Hospital Organizations’

PHOs Let Quality, Cost Guide Them Toward Value-Based Reimbursement

April 16th, 2015 by Cheryl Miller

Instead of focusing on volume, physician-hospital organizations (PHOs) are concentrating on value-based care, says Travis Ansel, senior manager with the Healthcare Strategy Group. The once revenue-based organizations are now focused on quality and cost, realizing that if they can’t manage those two things, their reimbursement will go down.

Why is the PHO model going to work now? We always get this question. This comes more from doctors than it does from administrators: why are PHOs going to work now, when they didn’t work before? The simple answer is that before, PHOs were revenue-focused. They were about getting the biggest number of physicians into the model regardless of their quality. It was run by the hospital as a methodology for increasing rates. Then fee-for-service (FFS) didn’t really give anybody the incentive to work together.

They gave everybody the incentive to sign their name on the contract and hope for better rates. What we’re seeing PHOs focus on now is quality and cost, with the idea that if they can’t manage those two things, their reimbursement is going to go down. We have clinical integration guidance from the Federal Trade Commission (FTC), which gives everybody the framework for developing joint contracting capabilities and defines legally how we can work together. What we’re seeing now, since there’s more of a clinical than a revenue focus for PHOs, is that they are more dominated by physician leadership. The hospital keeps control over the purse strings, but gives the governance of the group to physicians. They are letting them take the leadership on the cost and quality protocols that they need to develop to be successful.

There is also the way that payment reform is transitioning the incentives. They’re focused on getting quality and cost across populations or across episodes of care. They’re giving the right incentives for collaboration, which the PHO model provides the forum for.

Source: Physician-Hospital Organizations: Framework for Clinical Integration and Value-Based Reimbursement

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Physician-Hospital Organizations: Framework for Clinical Integration and Value-Based Reimbursement describes the relevance of the PHO model to today’s healthcare market, offering strategies to leverage the physician-hospital organization for maximum clinical outcomes, competencies and value-based reimbursement.

4 Factors Driving Resurgence in the Physician-Hospital Organization Model Today

October 10th, 2014 by Cheryl Miller

As healthcare organizations seek the infrastructure to respond to emerging payment models like accountable care organizations (ACOs), bundled payments, narrow networks and direct contracts, the physician-hospital organization (PHO) model is experiencing a resurgence nationwide.

But will it work this time? Four factors make the PHO attractive, says Travis Ansel, senior manager with the Healthcare Strategy Group, during Preparing for Value-Based Reimbursement Models: PHO Development for ACOs, Bundled Payments and Direct Contracting, a 45-minute webinar from the Healthcare Intelligence Network (HIN) now available for replay.

The first most immediate driver is independent physician alignment, says Mr. Ansel. While most markets are mature in terms of employment, there are still a number of markets where there are a significant number of independent physicians in key specialties. In these areas, the PHO model is more of an initial catchall type of alignment model, one that creates a loose tie between the hospital and the physicians in the market, and provides value to the physicians in terms of being protected as part of a larger group without having to become employed. One benefit for the hospitals is that they can align independent physicians en masse and create common incentives, instead of having to negotiate alignment models or arrangements with all independent physicians in their market.

The second driver is the increasing mutual accountability for quality and cost across providers. In the wake of transitioning payment models under payment and insurance reform, insurers and payors are trying to drive mutual accountability for patient costs to physicians and hospitals. The PHO is an appropriate response for those providers to work together to manage the cost of a population and of an episode of care in order to make sure everybody’s successful.

The third factor driving resurgence in PHO activity is the consolidation and distribution of resources that will allow providers to be successful in managing quality and cost. As healthcare reform and payment reform mature, information technology (IT) competencies, clinical competencies, care coordination practices, and exploring the patient-centered medical home (PCMH) concept are often unrealistic at the individual practice level. The PHO gives physicians and hospitals the platform to work on those care competencies together, build them in one place and then distribute them to PHO members — a “win-win for everybody,” Mr. Ansel says.

The final driver is the need for an effective framework for clinical integration. While there are already a number of clinically integrated organizations around the country, “For the bottom 90 percent of healthcare organizations in the country, clinical integration is still that thing that’s on our to-do list, but it always gets bumped to the back of the to-do list; because, we have more immediate needs, or more immediate strategic priorities,” Mr. Ansel says. Clinically integrated models are needed as a strategy to respond to payment reform, to allow joint contracts between physicians and hospitals, and to enable sharing of payments effectively, whether those are shared savings payments, bundled payments, etc. Adds Mr. Ansel:

“The PHO model provides a great initial step to building that clinically integrated network platform, and gives providers and the hospital a great model for working together to start building the competencies towards a clinically integrated network.”

Click here for an interview with Mr. Ansel.