Physicians, patients, and administrators: a realignment of relationships

The increased reliance on case mix to establish prospective rates of compensation creates an imperative to alter the traditional relationship of physicians to hospitals and to assign the responsibility for the fiscal effects of clinical decisions to the medical staff. This article identifies the physician's admitting policies as an area in which increased cooperation might augment hospital revenues. Conversely, the analysis identifies the physician's prescribing decisions as an area of conflict that must be resolved in order to control costs and preserve the long-term survival of the hospital. Also examined are relationships and organizational arrangements that not only contribute to the resolution of inevitable conflicts but also enhance the beneficial effects of increased cooperation. The article concludes with an examination of the undesirable effects the full implementation of these arrangements might have on the patient.