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The organization of heart services. Part Two: Structural alternatives for the successful heart services organization
1Ronning Management Group, Inc., Mammoth Lakes, CA.
Insights
This article outlines models for establishing a heart institute to improve provider negotiations with managed care and payers. It details increasing levels of service integration within these organizational models.
Area of Science:
- Healthcare Management
- Health Services Research
- Organizational Studies
Background:
- Developing effective organizational structures is crucial for healthcare providers to navigate managed care and third-party payer landscapes.
- Heart institutes require specific models to optimize their market position and operational efficiency.
Purpose of the Study:
- To present a framework of available models for establishing a heart institute.
- To analyze the components and integration levels of different heart institute organizational models.
- To enhance provider positioning within managed care and with third-party payers.
Main Methods:
- Comparative analysis of different heart institute organizational models.
- Framework development based on governance, management, and service integration.
- Sequential presentation of models with increasing integration levels.
Main Results:
- Common components include advisory boards/steering committees and professional management (e.g., executive director).
- Provider contracting ability correlates with the degree of service integration.
- Models discussed include service-line approach, cardiac integrated physician organization (IPO), and integrated care hospital organization (ICHO), with ICHO demonstrating the highest integration.
Conclusions:
- The choice of organizational model significantly impacts a heart institute's ability to contract and operate effectively.
- Increasing service integration, as seen in models like ICHO, offers greater potential for market success.
- Further discussion on PHO models and legal considerations is provided in subsequent parts of the series.
Abstract:
This article provides a framework of the various models currently available to form a heart institute that is designed to enhance the position of the providers with managed care and other third-party payers. Each model has components that are similar: Governance and management are provided by an advisory board or steering committee. The board is typically comprised of representatives of both the physicians and the hospital. Daily management is provided by a professional manager, such as an executive director. The ability of the model to locate, negotiate and enter into contracts for the providers is determined by the amount of integration of services provided by the participants. Each of the models discussed in sequence represents increasing integration; therefore, the cardiac IPO has more integration--particularly if it offers a new service such as capitation to the market--than the service-line approach. The ICHO has the most integration of the models presented. This form of organization will be addressed more completely in Part Four of this series. Part Three will discuss PHO models in-depth as well as address certain legal requirements that should be considered when developing a new, integrated PHO entity.