Why physicians want hospitals 1 job satisfaction 2

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Why physicians want hospitals 1. Job satisfaction 2. Increased annual income 3. Good benefits/retirement 4. Work-life balance 5. Consistent income Why physicians think hospitals want them 1. Market power 2. Decrease costs 3. More outpatient revenue 4. Improve patient outcomes 5. Enhance quality Paying Physicians FFS: payment depends on services performed; Insurance MD Salary to MDs: Salary plus possible bonus; Hospital employer MD Capitation: Pre-payment on per-enrollee, per month basis regardless of what MD does to patient: Insurance MD Other practice arrangement where physicians receive salary
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Radiology, Anesthesiology, Pathology, Emergency Med Hospital (contract) MD Group Practice (Salary) Physician Hospitals that purchase MD’s practice Hospital/Health system (salary) Physician Health system collects practice revenues, pays all practice expenses, keeps any profits System may have influence over where MD admits patients HMO Employer Staff Model HMO (salary) Physician MD only treats that HMO’s patients HMO covers all expenses Options for Medicare Participating: Accept Medicare “assignment” for all claims as payment in full (patients responsible for cost-sharing Nonparticipating: Make assignment on case by case basis Accept Medicare as payment in full for assigned claims Bill paitents more than Medicare fee for unassigned claims Limiting charge of 115% of 95% Medicare fee schedule (effectively 109.25%) Private contracting: Bill patients directly with no payments to physician or patient from Medicare Medicare pays MDs with a FFS system called “Resource-Based Relative Value Scale” (RBVS) Goals: Level playing field between specialists and primary care physicians Slow growth rate of Part B spending Limit out-of-pocket payments for elderly Each physician service performed has unique code – Current Procedure Terminology (CPT) Each CPT assigned 3 separate Relative Value Unit (RVU) 1. Work RVU: time, mental effort, technical skill 2. Practice expense RVU: rent, salaries 3. Malpractice expense RVU Adjustment for geographic practice cost index Sustainable growth rate (SGR) system Formula for annual updates to conversion factor Intended to keep spending growth consistent with growth in national economy Because volume has grown faster than the economy, the formula produces conversion factor updates that would cut physician payments
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