Managed Care - July 2008 - (Page 19) As doctors increasingly go to work for hospital systems, care might become more organized and effective, but plans could lose bargaining power medical director at Permanente Federation, the physician arm of Kaiser Permanente. Most hospitals shed the physician practices after a tumultuous few years, although not before some CEOs lost their jobs because of the financial calamity they caused. Jessee, the MGMA president, says this time around is different. For one thing, hospitals learned how not to structure a practice-acquisition deal. For another, physicians are different. “They’re starting to be more willing to sacrifice some autonomy for economic stability,” he says. “There are some people who will say, ‘The last thing I want to do is go to work for a hospital. I’ll go down with all flags flying.’ But the great bulk has really shifted. Physicians are not only interested and willing but actively seeking to become involved in some sort of a larger enterprise for the economic stability it offers.” Administrators of two large cardiology practices — traditionally one of medicine’s lucrative strongholds — recently told Jessee they are negotiating to be acquired by a hospital. “A few years ago there was no way in the world those organizations would even have considered the idea of going to work for a hospital,” he says. This is what’s different this time: Purchase price. Hospitals are no longer paying PHOTOGRAPH BY ERIC BAKKE “The economic climate for many medical practices has become so hostile,” says William Jessee, MD, president of the Medical Group Management Association. “Owners are looking for a way of getting out from running their practices.” JULY 2008 / MANAGED CARE 19
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