Are JVs Losing Some Luster?

Long-term partnerships
Southwestern Vermont Health Care President and CEO Harvey Yorke insists his Bennington-based system, which includes a 56-staffed-bed hospital, hospice and rehab centers, and a cancer center, has plenty of deals with doctors that he calls joint ventures—but his definition of the term isn't a widespread one. "In terms of JVs being bricks and mortar where the hospital and the docs share in management and income, we haven't done any," he says. But two years ago, the hospital was facing the loss of half of its radiologists. Though Vermont has a certificate-of-need program that makes starting healthcare centers difficult for physicians, headhunters were "ringing the phone off the hook," Yorke says, offering Southwestern Vermont's radiologists 100% more in income just to relocate (to neighboring New Hampshire). "We needed to fix that, so we did a joint venture to help improve their quality of life." That "joint venture" was an offer to pay for a service that uses doctors in Australia to read films electronically overnight, thus relieving radiologists from onerous call coverage responsibilities.

Peter Witham, MD, a practicing internist and president of the hospital's 130-physician medical staff, says physicians outside the most lucrative specialties have gotten more vocal about their opposition to specialty carveouts as they've seen what has gone on at other hospitals.

"When we looked at joint venturing, it almost seemed more fragmentary to the medical staff than uniting," he says. Because only the high-revenue physicians could be included, joint ventures can fracture the collegiality needed in a good medical staff that wants to work on coordinating patient care. "Because most joint ventures, in order to be successful, have to make a profit, we found them to be more skewed toward the business and financial incentives than toward patient care and quality."

Will employment spell JV extinction?
That said, Witham agrees that doctors feel pinched financially and that hospitals have to help. "We're struggling with some primary care access issues in this community that aren't solved by JVs," he says. Both CEO Yorke and the hospital's board "have been proactive about coming to the table and having frank discussions about how we can work together given the limits of our medical staff structure and the current regulatory environment," Witham says.

The idea of hospitals employing more of their physicians has been touted as a potential solution to the problem of declining physician income and interest in specialty centers in many markets, but Witham says many physicians in his area, where practice sizes are still largely in the ones and twos, still fear being "engulfed by the medical system." That said, employment is looking like a much more viable option in the area, he says, as younger doctors tend to prefer that model over the private practice/medical staff model that has been the hospital's tradition.

For its part, Southwestern Vermont Medical Center is moving in that direction. It has increased the number of employed physicians to about 40 of the 130 on the medical staff. "If, on a scale of one to 10, 10 was fully integrated and one was completely private practice, we're currently at between a four and five," says Yorke. "Our medical staff sees it moving forward to 10."