Michigan health system paying doctors for their advice

Specialists and primary care physicians will offer their take on quality, safety, efficiency and patient satisfaction.

By Victoria Stagg Elliott — Posted Feb. 8, 2011

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Some doctors at a Detroit-area hospital will start being paid for advice on how to improve patient safety and satisfaction, as well as care quality and efficiency.

St. John Macomb-Oakland-Hospital, Oakland Center in Madison Heights, Mich., in January signed a two-year management services agreement with the new Oakland Physician Professional Management Group. More than 50 physicians, out of the several hundred on the medical staff, are part of this group.

Most are in private practice, and both specialists and primary care physicians are included. Those participating will be paid for their time working on various projects. The hospital sees the agreement as a means of achieving greater alignment with physicians, as well as meeting various quality and outcome goals, such as reducing bedsores and falls.

"This is just another way to work with our physicians and to engage our medical staff," said Terry Hamilton, senior vice president of operations with St. John Providence Health System. "And we felt that, after having struggled operationally to improve, that participation of our medical staff would be a great way to bring a whole new dimension of expertise to the administration. Naturally, physicians can have a great role in improving quality."

The hospital pays Oakland Physician Professional Management Group for services. The company then distributes the money to participating physicians. To avoid contravening regulations governing hospital-physician relations, compensation is set at fair market value for the particular work performed, Hamilton said.

"We have to consider what is commercially reasonable," he said. "Also, there needs to be a difference between the value that a doctor is paid for professional services and administrative services."

Various co-management agreements have become more common during the past few years, but those usually involve establishing a company that will manage a specific service line or department for a hospital, including the delivery of care. St. John has several of those deals already established.

The latest management agreement is different, because it contracts with physicians to work on various issues affecting the entire institution.

Hospital officials see the project as part of the groundwork for a possible accountable care organization and bundled payments that are expected as part of health system reform.

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