RESEARCH PAPER

You are outside counsel to the Florence Nightingale Healthcare Corporation (FNHC), which is concerned that expenses in some of its ancillary departments are causing it to lose money under Medicare and HMO insurance. It would like to start charging its hospital-based physicians for some of the costs of running their departments. Its current relationship with these physicians is one in which they have exclusive contracts to work in these departments, but no money changes hands between them. The hospital handles all billing, staffing, and overhead, but it bills separately for facility charges vs. professional fees, and the physicians keep all the professional fees the hospital collects on their behalf. This is the standard practice in the industry. FNHC has the following suggestions for changing this arrangement: Have the radiology group pay for services, supplies, personnel, utilities, maintenance, and billing services furnished by the hospital. In a nonhospital, office-based setting, this package would normally cost about $100,000 to $150,000 per year. The hospital will charge the radiology group only $25,000 p. 574only if the hospitals’ gross revenue derived from radiology services exceeds $1,000,000 in the previous year. The hospital’s clinical laboratory, under the direction of the pathology group, would pay the hospital a 20 percent fee for “specimen collection and handling services” when a physician on the FNHC medical staff orders a test from the clinical lab. What advice would you give? Comprehensive Review Problem: Forming an Integrated Deliver y System Review the introductory discussion at page 340 and the description of Florence Nightingale Hospital at page 346. Now, consider the following methods the hospital might pursue for closer affiliation with physicians, in order to begin to form an integrated delivery system or an accountable care organization. Suppose this affiliation was undertaken either to market a comprehensive managed care insurance plan and participate in the Medicare shared savings program, or, less ambitiously, to establish an outpatient clinic. How would each of three possible integration/affiliation models fare under each of several business and legal factors that have been reviewed in this chapter? Fill in the following chart by indicating whether each business or legal factor would view each arrangement favorably (+), negatively ( − ), or in neutral/mixed way (/). p. 575 Physician Autonomy Clinical and Financial Integration Corporate Practice of Medicine Antitrust Referral Fee Law Tax Exempt Corporate Ownership The hospital’s corporate parent buys out physician practices and employs the physicians. Physician-Hospital Organization (PHO) Hospital and several physician groups form joint-venture partnership, contribute equal capital, and split the proceeds. Management Services Organization (MSO) Hospital contracts with independent physicians to provide office management services and to act as negotiating agent with insurers/ employers. In this Performance Assessment, you will write a Research Paper which you will have chosen from a problem in your text. You will begin by completing the Comprehensive Review Problem beginning on page 574 of the text. Make sure to include in your paper the results of the table on page 575. After you complete the chart, present your work in a paper of 5 to 7 pages and address what the stakes are for each major player in the Problem: the hospital, the PHO, and the MSO. In other words, you are explaining why you scored each factor the way you did on the chart. Cite your sources using correct American Psychological Association Style. For information on citations check these handouts from the APA Style tab on the library website.