Shifting Alliances Between Physicians and Payers

New contracting paradigms are creating alliances between physicians and payers on one side, squared off against hospitals on the other side.
alliances between physicians and payers

I was recently at a meeting where a respected physician leader made a fascinating observation. It is his belief that the new emphasis on value-based contracting and risk-based contracting is changing the historic alliances between physicians and hospitals on one side of the table, and payers on the other side of the table.

He believes that the new contracting paradigms are creating alliances between physicians and payers on one side, squared off against hospitals on the other side. If you think about many of the new initiatives coming out of CMS (care coordination management codes, for example) a common thread seems to be that paying physicians a little more can generate huge savings on what would otherwise be spent on hospital services.

At the risk of sounding like a broken record, I think this is great news for physicians. Hospital consolidation continues at a dizzying pace, creating massive enterprises with seemingly unlimited resources. And yet, the entities holding the money (payers) finally seem to realize that the folks in the white coats, if properly compensated and incentivized, can effectively bend the healthcare cost curve.

In Pennsylvania, my home state and the market that I am most familiar with, physicians are organizing clinically integrated networks designed to work with the payers to move money from the “hospital bucket” to the “physician bucket”. This sort of change is not going to happen overnight, but physicians are going to take back control of healthcare sometime in the not-so-distant future.

Who (other than hospitals) would not be encouraged by that?

You may also be interested in my articles about messenger model IPAs, the dangers of messenger model IPAs, and physician-only CINs.

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Dennis Hursh

Dennis Hursh

Dennis Hursh has been providing healthcare legal services in Pennsylvania since 1982. Since 1992, he has been a physician's lawyer serving as Managing Partner of Physician Agreements Health Law. Dennis has devoted his life to serving physicians and physician organizations, such as POs, IPAs, CINs and medical practices. He is the author of the definitive book on physician contracts "The Final Hurdle - a Physician's Guide to Negotiating a Fair Employment Agreement, and a frequent lecturer on physician employment agreements.

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