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Return of the PHO?

Philip Betbeze, for HealthLeaders Media, April 4, 2012

A pathway to employment
As usual, a burning platform is needed to lead change, Kaplan says. In his market, it was healthcare reform leading to likely CMS shared savings and commercial ACO contracts. But he questions whether the CIN will be a permanent fixture in the healthcare landscape. In this climate, even the definition of hospital seems up for debate.

"It's a comeback for the concepts of the original PHOs," he says. "These are bridging strategies, which allow us to work together. If external factors support CIN structures in the future, they may last."

But Kaplan acknowledges that environmental forces encouraging greater levels of coordination to improve quality and lower costs may end up forcing increasing numbers of healthcare organizations to adopt the integrated delivery system model.

"The ICO is a vehicle whereby our independent physician partners can remain independent, but if the market changes and we need tighter alignment, we will be in a better position to migrate there," Kaplan says. "I believe ultimately that's what's going to happen."

Even Advocate's Manning, with his perspective as part of perhaps the oldest and most vetted PHO in the nation, says the PHO role is the transitioning structure that will increasingly serve as a nerve center for dialogue about improving clinical outcomes, efficiency, and patient experience.

"It has its own culture and a sense of citizenship, but what is the meaning of independence in an accountable care world?" he asks rhetorically. "At the same time, most of the physicians who become employed are currently members of our PHO. Almost exclusively here, any physician who becomes employed starts in the PHO. But it doesn't matter if you're employed or private practice. The only thing that matters is performance."

Reprint HLR0312-4


This article appears in the March 2012 issue of HealthLeaders magazine.


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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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.