Continuing with the commentary on Hospital Review's list of practices to increase profitability, we return for the third time to a tip involving working with physicians. I think I see a pattern here.
Tip #6: Consider partnering with local physicians to reduce competition for outpatient cases
Joint venturing with local physicians to develop a surgery center has become commonplace. If you have not done it yet, the prime opportunity has probably past. Changes in reimbursement are making these centers far less attractive financially than they have been in the past. And they have been very lucrative for investors in the past. Hospitals need to be open to sharing procedure and testing revenue with medical staff members that years ago had been exclusively the domain of the hospital. I have seen first hand the consequences of trying to keep control of these services in today's market. The physicians will open up their own center and take business away from the hospital completely. Part of something is better than all of nothing.
Hospital must develop a comprehensive outpatient strategy for all services that recognizes its physicians as key partners for its long term viability. In these lean economic times it seems contra intuitive to be sharing profitable outpatient services. This would be true if there were no alternative for competition. Unfortunately the threat of competition is real making it better for everybody including the community for hospitals and physicians to cooperate rather than compete.
More on profitability practices tomorrow.
Mark Brodeur
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