Ask the expert: How does the physician equity medical staff model work?

When physicians launch provider-owned hospitals, they own a portion of the facility’s equity. This arrangement is designed to provide physicians a source of revenue from their investment. It is also designed to ensure that physicians’ interests are aligned with the hospital’s interests. Experience shows that a physician investor is more likely to comply with cost control efforts and honor block booking rules and surgery start times if he or she has equity in the hospital. If the physician doesn’t, his or her fellow physicians are the first to turn up the heat because the return on their investment dollars is at stake.

This week’s question and answer are from The Greeley Guide to New Medical Staff Models by Richard A. Sheff, MD, CMSL and William K. Cors, MD, MMM, FACPE, CMSL.