The following paper is ÃÂ° discussion about the professional physician-hospital integration and the strategies that can be implemented for effective integration. The movement toward an integrated industry includes affiliations among physicians, alliances between physicians and hospitals, and combinations of health care financing and delivery. Various legal models have evolved based on the dominant central organization and the degree of provider integration. Within an integrated delivery system, one central organization typically manages the entire system. For example, different models include systems controlled by hospitals or physicians, HMO models, and the equity model owned by shareholders. Considerable conflict for control has ensued as hospitals, physicians, HMOs, and insurers vie for network leadership. (Greenberg et al, 1985) The degree of integration differentiates the transitional or "entry models" of integration such as management service organizations, group practices without walls, and physician-hospital organizations (PHOs) from the fully integrated structures that include physicians, hospitals, and insurance products within one organization.
These models often overlap, and hybrid models are common.
Whatever integration model providers choose, the movement toward integration involves numerous transactions and arrangements that have important legal consequences. As the next section explains, the federal anti-kickback and self-referral, tax exemption, and antitrust laws place significant restrictions on integrated delivery system development.
Vertical integration of physicians with hospitals does not receive the same level of protection. Hospital integration arrangements typically include physician practice acquisition and subsequent physician employment, especially for the primary care physician component that is essential to success under managed competition.
Before ÃÂ° hospital vertically integrates with physicians holding managed care contracts, it cannot be assured of the anti-kickback consequences of combining managed care contracts into an integrated system, despite advance rulings from other agencies that the arrangement provides ÃÂ° public benefit and is pro competitive. Despite the need for provider guidance, the...