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Hospitals Acquiring Physician Practices Face New Challenges

May 2, 2012

Money talks—but it’s not just about the money either.

An increasing number of hospitals are acquiring physician practices with the belief that it will help better align their interests with those of physicians in areas like quality of care, patient safety, health information technology, and growth of service lines.

Healthcare reform may also play a role in this trend. The Patient Protection and Affordable Care Act of 2010 requires hospitals to have affiliated physician practices in order to develop accountable care organizations a new model of healthcare delivery envisioned in the act.

“Few new physicians are starting independent medical practices, and physicians in long-established practices are finding it more difficult to manage them,” Paul Anderson, director of risk management publications at Plymouth Meeting, PA-based ECRI Institute. “Meanwhile, hospitals and health systems are finding it harder to resist acquiring independent practices.”

ECRI Institute, an independent nonprofit that researches the best approaches to improving patient care, has put this trend under a microscope and recently published an article to help hospitals face the unique risks associated with the acquisition of physician practices.

ECRI Institute says that hospital executive leaders need to be well prepared to identify and manage liability and patient safety risks, ensure that a high quality of care is provided in the acquired practices, and monitor patient satisfaction.

Risk managers, who are responsible for implementing risk reduction strategies, must understand key executive decisions regarding practice acquisition, physician hiring, and how practice acquisition impacts risk management functions.

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