Does the OIG Get It?
I would suggest that it does. In a dramatic reversal of its 1999 opinion letter essentially banning “gainsharing agreements”, the Office of the Insurance General (OIG) has now approved six such arrangements. While gainsharing is not a strategy for every hospital or physician group there is a larger message being delivered. Financial alignment of physicians and hospitals can lead to improvements in quality, efficiency, and profitability. There are numerous opportunities for physicians and hospitals to align yet only a small minority see the advantage and capitalize on it.
It makes sense for the two major players in the Healthcare enterprise to work together through alignment as opposed to our time honored tradition of protecting ones turf. With few exceptions, physicians and hospitals truly are interdependent. Even though it is logical, changing the culture of physician/hospital relationships is an incredibly challenging thing to do.
Gainsharing is an exceptionally difficult option but it is worth exploring. How many hospitals have succeeded in achieving standardization by begging for their medical staffs’ cooperation, time, and expertise? Probably not many. I would suggest that those who ask “what’s in it for the Docs?”, then act on the answer, will have a much higher probability of success than those who do not.
The recent ruling by the OIG will not allow for significant growth of these arrangements due to the complexity of compliance. The OIG must approve these arrangements individually, focusing on accountability, quality controls, and safeguards against payments for referrals. Specifically, in the six approved, there are eight common characteristics that would need to be part of any arrangement submitted for approval. However, there is still considerable risk involved. As acceptance of alignment continues there is a good chance that legislation will be passed to remove the conflicting legal pitfalls. Those who are concerned with the legal risks, while embracing the concept, can begin the process with “gainsharing lite.” This is as simple as paying physicians fair market value for their time, and creating a fund where a percentage of the savings is earmarked for technology or other equipment benefiting the section where the savings originated.
Another compelling reason to move towards alignment is the recent MedPac recommendations to Congress regarding pay for performance for physicians and hospitals. How will this work if there is no alignment? The most compelling reason is that it just makes sense. The healthcare enterprise is probably the most technologically advanced industry when it comes to clinical advances yet lags behind in the way business is conducted. This has led to increased competition among the key players further dividing the pie as well as adding cost to the system due to the proliferation of technology. If the major parties could see this, then joining forces economically would only bear positive results, not only for the aligned parties but for the patients as well. It is difficult to change our ways, but considering the alternatives, this seems like the best path. Alignment covers the spectrum from joint ventures, integrated delivery systems and leasing arrangements to gainsharing, so if the OIG is beginning to get it, why don’t you?