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Hospitals Advised to Seek Improvements Through Collaboration With Doctors

Hospitals Advised to Seek Improvements Through Collaboration With Doctors

January 26, 2005

Administrators urged to ally with physicians to improve revenues, not compete with them for patients.

ATLANTA – Hospital administrators looking to improve financial results and address quality issues should identify ways to generate physician collaboration, according to experts who addressed a conference of hospital officials here last weekend.  Hospital executives representing facilities in Georgia, Alabama, the Carolinas, Tennessee, Mississippi, Louisiana, and Texas attended the conference.

"Hospitals and physicians are at odds over the division of the revenue 'pie,' but there are opportunities for them to improve margins through collaboration," said conference chair Toby Watt, a healthcare attorney with the Atlanta office of Smith Moore LLP.  "Many hospitals are now recognizing that mutually beneficial relationships with physicians create more opportunities to address revenue and service issues than an adversarial environment."

Joint venturing, managed care arrangements, incentive arrangements, and proactive physician recruiting techniques are among the concepts that speakers advised hospital administrators to consider as they work to build collaborative relationships with physicians who practice at their facilities.  The conference faculty included Watt, Barry Herrin, and Bob Wilson, all partners in Smith Moore's health care practice group, as well as Victor Seoane, an investment banker who addressed valuation problems, and Tom Gilroy, a consultant who provided pointers for successful negotiations between hospitals and physicians.

Congressman Tom Price (R-GA), a practicing orthopaedic surgeon from Roswell, GA, told conference attendees to get involved in the political process if they want the government to help them facilitate relationships with physicians.  "Everything that affects the delivery of health care in this country is governed by people with a political agenda." Price said.

George G. Karahalis, an official with the U.S. Centers for Medicare and Medicaid Services (CMS) in Baltimore, Maryland, spoke on the timely issue of quality of service and CMS' current initiatives on quality improvement.  "Congress and your government are looking for greater value in the services they are purchasing," warned Karahalis, "and thoughtful hospitals are exploring ways of enhancing the value of their services."

Conference keynote speaker Representative Phil Gingrey (R-GA), a Marietta, GA obstetrician, identified Medicare as an issue Congress would continue working to improve, but predicted little in the way of budget increases.  Hospitals and physicians, he said, should therefore seek collaborative ways of delivering services and earning revenues.  Gingrey commented that physicians aren’t "going to sell Tupperware" to increase their revenues.

Contact: Steve Powell
For Smith Moore LLP

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