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Alternative Models of Hospital‐Physician Affiliation as the United States Moves Away from Tight Managed Care
Author(s) -
CASALINO LAWRENCE,
ROBINSON JAMES C.
Publication year - 2003
Publication title -
the milbank quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.563
H-Index - 101
eISSN - 1468-0009
pISSN - 0887-378X
DOI - 10.1111/1468-0009.t01-2-00056
Subject(s) - managed care , purchasing , work (physics) , corporate governance , business , hospital system , family medicine , medicine , health care , finance , political science , law , marketing , mechanical engineering , engineering
D uring the 1990s, many U.S. hospitals rushed to affiliate tightly with physicians by purchasing practices and funding the creation of Independent Practice Associations (IPAs) and Physician Hospital Organizations (PHOs) (Burns, DeGraaff, and Singh 1999; Burns and Thorpe 1993; Morrisey et al. 1996). Expectations were high for the national growth of capitated “full‐risk” and “shared‐risk” contracting. These contracting models were already prevalent in California and were found in a number of cities around the United States. Risk contracting was supposed to reward physicians and hospitals that could work together to control costs. It was commonly believed that “systems will either migrate to full integration or decline to … secondary status … vertically integrated systems enjoy irresistible economic advantages” (Governance Committee 1993, xiv). Hospital‐physician integration appeared to be an idea whose time had come. But when risk contracting failed to spread and financial and operational problems developed in hospital‐based IPAs and PHOs and in the physician practices that hospitals had purchased (Burns et al. 2000; Burns and Pauly 2002; Peters 1999), the prevailing wisdom changed.