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Return of the PHO?

Philip Betbeze, for HealthLeaders Media, April 4, 2012

Recycling a relic?
It's helpful to get away from the vision of the PHO of the past. Manning says the new vision is a way for hospitals and physicians to begin to work together, with both employed doctors and those not ready to enter into full employment models.

"A PHO is a way to connect with the community-based physician practice model," Manning says. "Organizations dedicated to the employment model might see less value in a PHO than those who want a more pluralistic approach like we have chosen. The key is the value that can be created by truly integrating or engaging with physicians."

This is why the integration factor is so important.

Iowa Health System, which  includes 15 hospitals across Iowa and Illinois and more than 800 employed providers, seeks that pluralistic approach, says Alan Kaplan, MD, the system's vice president and chief medical officer, who has been building a PHO-like organization there for the past two years. The clinically integrated network or CIN, he says, is a nonprofit corporation based upon improving quality, enhancing patient experience, and increasing the overall value of healthcare. It's part of the longer-term strategy of engaging physicians as the system enters into risk- and performance-based contracting.

"When I came here, my boss, Bill Leaver, IHS president and CEO, told me that my main job is to build an ACO."

In developing the ACO, Kaplan set about creating a CIN, which he says is taking place along with plans to integrate all of the owned physician practices at IHS under one structure. Physician alignment with IHS's employed groups began January 1, but Kaplan still needed a way to bring the area's independent physicians into the fold, because forming an ACO, the ultimate goal, can't happen without them.

"It's great that we have employed physicians, but two thirds of our medical staff is independent," he says. "They are our partners, and we cannot deliver care without them. So we have to engage them in our efforts to improve quality and create a better patient experience."

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1 comments on "Return of the PHO?"


Michael Samms (4/4/2012 at 11:17 AM)
As former CEO of a large PHO, (2,400 physicians, 20 hospitals), an additional dimension is in messenger model contracting of self-insured employers healthcare plans. Lower plan costs coupled with higher quality performance was a hallmark. We administered HMO and PPO plans for large employers (8,000 and 23,000 employees). For one plan, Mercer performed actuarial studies and reported year two premium equivalents of ½% lower. Remarkable performance coupled with stellar employee satisfaction. If run well, everybody comes out ahead.