Co-management is an increasingly popular model for partnerships between hospitals and physician-owned ambulatory surgery centers (ASC). Under co-management, hospitals maintain full ownership of the ASC and management services are contracted to the physician group. Hospitals should negotiate a two-level payment model for co-management compensation fees in order to mitigate risk and ensure quality.
The base fee is a fixed annual fee that reflects fair market value (FMV) for management responsibilities necessary to operate the ASC, while the incentive fee is a variable fee that reflects FMV for performance on quality and efficiency goals.
With little control over supervision and delivery of services, hospitals take a significant risk by investing in ASCs and handing over management to physicians. Incentive fees help shift some of that risk from the hospital to the physician group by making a portion of the total compensation contingent on how well physicians perform their clinical and management services.
Incentive fees mitigate risk to hospitals in co-managed ASCs
One of our Marketing and Planning Leadership Council members approached us with a project regarding a new offsite facility they were looking to develop into a short stay hospital “lite” model.
We interviewed facility administrators at three organizations who had developed an offsite facility to understand the physician models used, services offered, patient populations targeted, and any challenges encountered during the development process.
Planning the short stay hospital
Looking for a unique holiday gift for colleagues interested in service line transformation? We've made two posters available for our members to download or order from our website—just in time for the new year.
Our research teams created the posters earlier this year to provide our members with additional support in meeting the challenges of service line transformation. MPLC members may click the links below to download or order copies of the posters for themselves and/or colleagues at their institution.
Service line-related posters now available on our website