1 The BayCare Experience: Physician Joint Ventures Paul R. Summerside, MD Chief Medical Officer...
-
Upload
julia-parker -
Category
Documents
-
view
212 -
download
0
Transcript of 1 The BayCare Experience: Physician Joint Ventures Paul R. Summerside, MD Chief Medical Officer...
1
The BayCare Experience:Physician Joint Ventures
Paul R. Summerside, MD
Chief Medical Officer
BayCare Clinic, LLP
President, Board of Managers
BayCare Aurora, LLC
Aurora BayCare Medical Center (ABMC)
• ABMC is an acute care hospital that opened in 2001• Joint Venture of BayCare Clinic (a physician partnership) and
Aurora Health Care (a not-for-profit organization)• 40% Physician ownership• 167 Beds including the following services:
- General Medical and Surgical - Women’s Health
- Adult ICU/eICU - Obstetrics
- Cardiovascular - Level III Neo-natal ICU
- Neuroscience - Pediatric Inpatient
- Orthopedic - Inpatient Rehabilitation
- Emergency Services including a Level II Trauma Center - Oncology
• Located in Green Bay, Wisconsin• 1,100 employees• Operates under the Planetree philosophy: patient centered care in
a healing environment
BayCare History
• 1996 - Independent Specialty Practices Form MSO• 1998 - Letter of Intent w/ AHC• 1999 - Integration of MSO to BayCare Clinic• 1999 - Finalize JV Operating Agreement• 2000 - Break Ground on ABMC Hospital• 9/01 - Opening ABMC Tertiary Hospital• 2003 - ABMC Reaches Calendar Year Profitability • 2004 - ABMC Pays off Operating Line and
Accumulates Cash Reserve• 2007 - ABMC 5th Consecutive year w/ > 12% margin
and begins seventh expansion
Joint Ventures….Why?
– Am I in trouble?
– Am I at risk?
– Will I be at risk?
Risk Avoidance = 10x Pleasure Pursuit
Change
1. Fixed Costs
2. Physician Loyalty
3. Capital Needs
4. Regulatory Concerns
5. Safety/Quality
6. Payor Mix Risk
Hospital System Anxieties
Maslow’s Hierarchy of Needs
Understanding Motivation
1. Loss of lifestyle
2. Loss of Control
3. Loss of Colleagues
4. Loss of Respect
Physician Fears/Needs
0 Volume
$ M
illi
ons
LOSS
COST
PROFIT
REVENUE
Hospital Finance
0 Volume
$ T
hous
ands
LOSS
COST
PROFITREVENUE
Physician Finance
0 Volume
$ T
hous
ands
LOSS
COST
PROFIT
I Move I Stay
Ris
k C
orri
dor
REVENUE
Physician
0 Volume
$ M
illi
ons
LOSS
COST
PROFIT
Ortho HappyOrtho Sad
Ris
k C
orri
dor
REVENUE
Hospital Finance Fears
Institutional: Greatest Good for the Greatest Number
(Missions)
Physician: My Income, My Overhead,
My Time, My Patients (Goals)
Clash of Cultural Values
Reliance on benevolent dictatorships
w/ a “Mission”
Psst… remember RESPECT and Control!
Physician Fears…
The Renter vs. Owner
Neurological Spine Costs Among Six Centers
No Complications
020,00040,00060,00080,000
100,000120,000140,000160,000180,000200,000220,000240,000
0 1 2 3 4 5 6 7
• Key personnel like each other;
• Understanding partner’s cultural values;
• Respect of partner’s value;
• Willingness to relinquish control.(If you love them, set them free!)
Keys to Successful Join Ventures
If you want to be a lion tamer….
you better at least like the animals.
Hospital System Anxieties
• Fixed Costs• Physician Loyalty• Capital• Regulatory • Safety/Quality• Payor Mix Risk• Loss of Profitability and
Mission
Physician Anxieties
• Loss Lifestyle• Loss of Control/Quality • Loss of Colleagues• Loss of Respect
Aligning Incentives (Fears!)
• Ownership• 40% BayCare Physicians• 60% Aurora• All Stark Controlled Revenues in the JV
• Governance (MAD) Board • Five Aurora and Five BayCare• 70% Super Majority Rule• Partner Veto all Self-Dealing• Non-competition
BayCare Aurora Experiment
• Results:– BayCare Clinic
• 1999 – 53 specialists» $44 million net collections
• 2007 – 100 specialists» 40 physician extenders» $105 million net collections
BayCare Aurora Experiment
• BayCare Aurora LLC• 1999 – Two Surgery Centers
» $8 million gross revenues
• 2007 – Tertiary Hospital System» $200 million gross revenues» Largest Taxpayer in County
BayCare Aurora Experiment
IP and OP Discharges Since 2002
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Qtr 12002
Qtr 22002
Qtr 32002
Qtr 42002
Qtr 12003
Qtr 22003
Qtr 32003
Qtr 42003
Qtr 12004
Qtr 22004
Qtr 32004
Qtr 42004
Qtr 12005
Qtr 22005
Qtr 32005
Qtr 42005
Qtr 12006
Qtr 22006
Qtr 32006
Qtr 42006
* Source: Aurora Loyalty Index Data Through Q2 2007
40%
45%
50%
55%
60%
65%
2001 2002 2003 2004 2005 2006 Q12007
Q22007
Patient Satisfaction – Inpatient Services
40%
45%
50%
55%
60%
65%
70%
75%
2001 2002 2003 2004 2005 2006 Q12007
Q22007
* Source: Aurora Loyalty Index Data Through Q2 2007
Patient Satisfaction – Outpatient Ambulatory
“In the Absence of a Great Dream…
Pettiness Prevails.”
--Peter Senge