Related Experiment Videos
Economic credentialing: the propriety of managing physician costs through privileging
1University of Iowa, USA.
Insights
Hospital executives can use economic credentialing to manage physician costs, but legal challenges may arise. Careful application is advised, especially concerning Medicaid patient access, as federal regulations may apply.
Area of Science:
- Healthcare Management
- Health Law
- Medical Economics
Background:
- Hospital executives lack direct control over physicians, the primary cost drivers.
- Managing institutional costs is a significant challenge for hospital leadership.
- Physician behavior significantly impacts hospital financial performance.
Purpose of the Study:
- To explore the use of economic credentialing as a cost-management strategy for hospitals.
- To analyze the legal implications and propriety of economic credentialing.
- To assess the potential impact of economic credentialing on physician behavior and patient access.
Main Methods:
- Review of existing literature and case law on economic credentialing.
- Analysis of legal precedents and expert commentary.
- Examination of the role of hospital governance in cost control.
Main Results:
- Economic credentialing offers hospitals a powerful tool for fiscal control over physicians.
- The legality of economic credentialing is not definitively settled, with varying interpretations.
- Hospitals must exercise caution to avoid legal challenges when implementing economic credentialing.
Conclusions:
- Economic credentialing presents a significant opportunity for hospital cost management.
- Legal risks associated with economic credentialing necessitate careful implementation.
- Federal oversight may influence the use of economic credentialing, particularly concerning access for vulnerable patient populations like Medicaid beneficiaries.
Abstract:
Hospital executives face the unique task of managing the costs of an institution in which they have no direct managerial authority over the primary cost drivers, namely, the physicians who practice in the hospital. Perhaps the most controversial method of controlling physician costs consists of the application of economic factors to the credentialing process. Using the credentialing process as a technique to exert fiscal control over physicians affords hospital executives and their governing boards a tremendous cost-management opportunity. The legal propriety of economic credentialing remains unsettled. Many commentators, relying on limited case law, conclude that hospitals can engage in economic credentialing. Nevertheless, hospitals should exercise care when employing an economic rationale to restrict privileges lest they stir up legal challenges. Moreover, if hospitals use economic credentialing to limit medicaid patients' access to hospitals by excluding these patients' physicians from the hospital, the federal government may have the last word on the propriety of the practice.