The HCV model is designed to be a major strategy for
rebuilding the hospital-physician partnership. To regain and expand
market share, hospitals and physicians together must adopt an aggressive
patient-oriented stance that combines high-quality care and highly
responsive service. Under the banner of “integration,” there have been
numerous attempts to reduce healthcare costs and improve medical outcomes.
But none of the proposed solutions has correctly aligned the interests of
the many players involved in delivering healthcare.
The current models of “integrated systems” and
physician practice management organizations respond to investors and
government regulation, not patients’ interests. PHOs, MSOs and MCOs in many
hospitals have focused on reducing costs and controlling physician
behavior. Because physicians could not or would not invest in these
solutions, they became employees of the system. Where physicians do not own
or direct, they are not committed to making the models successful.
The HCV is based
on the philosophy that when physicians own and direct the enterprise, they
have more control over healthcare delivery, provide consumers with options
which patients prefer, gain autonomy in their medical practice, increase
their fee-for-service revenue, and can participate in the financial rewards
from services they use every day in the practice of medicine.
The HCV concept is
the competitive alternative that hospitals have needed to respond to the
threat from freestanding specialty facilities. Through the HCV, hospitals
can now offer their medical staff the investment opportunities that
physicians are seeking. The HCV’s short-stay “ambulatory hospital” is the centerpiece
of the hospital-physician joint venture strategy. The ambulatory hospital
will be programmed and custom-designed to meet local and community needs.
The services offered will be those that can be successfully supported by
the physicians of the HCV, and the surrounding medical community.
non-tertiary facility will be licensed as a hospital with 20-50 beds for
short-stay (72-hour) surgical recovery and OB with family-centered
birthing. Unlike most traditional hospitals, services will be performed
where they are needed most. Imaging and laboratory services will be located
on the HCV campus, not a twenty-minute drive to the “medical center.” Before the hospital is even built,
the planning and research process will identify who will use the hospital,
what services and procedures will be provided, what equipment will be
needed, and how it will be owned and directed.
CASE: How the HealthCare Village® Help Hospitals
The HCV is an economic partnership of the hospital and its physicians
which will succeed due to physician loyalty, patient satisfaction, and
better health outcomes.
The HCV is designed to respond to the pressures
facing hospitals today:
are often dissatisfied with their healthcare experience
are losing market share to outpatient specialty facilities
relationships are worsening
are building their own ambulatory facilities, “skimming” the most
Hospitals need a new physician relations
In the process of designing the HealthCare Village®, we
interviewed over 2,000 physicians. From these interviews, it is clear that
doctors are not getting what they need from their hospitals. Physicians
today are searching for autonomy, both clinical and financial. Their
financial goals are not being met. Managed care’s “hassle factors” are
increasing physicians’ administrative costs, e.g.., insurance, scheduling,
and collections. Hospital employment and Wall Street-backed physician
practice management companies have been costly failures. Physicians want to
refocus on their patients. The bottom line is that the HCV is a better
business model and better practice site for its physician owner-partners.
The HCV offers hospitals a better competitive strategy
to maintain and expand market share in the community. The short-stay
ambulatory hospitals returns lost specialty procedures, and restores
physician loyalty. The HCV is an effective counter-response to other
investment opportunities now being offered to physicians by for profit
competitors. In the HCV, physicians have an array of investment options,
including ownership in the ambulatory hospital and surgical center, real
estate, lab and imaging services.
HCV is a better capital solution
The HCV is a better Capital solution for hospitals. The Ward Group
can bring “off-balance sheet” financing to the project at various levels,
depending on the needs of the hospital sponsors. Shared ownership with
physicians also reduces the hospital’s upfront costs. The ambulatory
hospital can reach break-even and profitability more rapidly under the
experienced management provided by Johnson & Johnson. Increased
physician commitment can also drive volume and revenues, promoting
financial success and increasing the financial contribution of the HCV to
the hospital. Other fiscal benefits of the HCV include improving the payer
mix with more fee-for-service business. The HCV can increase tertiary care
referrals, and keep referrals “in the system.”
HCV is a growth opportunity
The HCV is an opportunity for the growth-oriented hospitals.
Investment in the ambulatory hospital expands the hospital’s ambulatory
volume and revenues. Sponsorship of the ambulatory hospital is available to
hospitals, assuming they are willing to share the investment opportunity
with physicians. There is also a facility naming opportunity for
philanthropy or corporate partners. Hospitals can be charter members of the
hospital and HCV governing boards. The real benefit of physician
partnership to the hospital is that the doctors are in your deal, not their
own or someone else’s.
HCV is a financial opportunity
The hospital’s financial benefits are increased
ambulatory care revenues; the expansion can be financed with “off-balance
sheet” capital. Financial risk is reduced by partnering with an experienced
ambulatory center developer. The time to break-even is reduced. There are
other financial benefits, from increased referrals to the hospital, and
expanded brand-awareness which also drives increased volume. Ambulatory
care is the growth sector of healthcare in the Millennium. Many hospitals
will experience 50% of more revenues from the ambulatory side. And profits
from the HCV can offset the hospital’s uncompensated care costs.
To summarize the hospital’s opportunities for investment side-by-side
with physician in the HCV include:
centers of excellence for hospital-employed physicians, e.g.., primary
ambulatory hospital – minority owner
systems and technology – investor or joint-venture
and retail health services, eg., pharmacy, laboratory, imaging, men's’
and women's’ spa, health and fitness center – ownership or joint