The integration of physicians and hospitals is one such step. This merger plan has been devised to salvage the healthcare industry by reducing its costs.
Hospital- Physician integration has been one of the most striking developments in the medical fraternity. By 1998, nearly 66% of the hospitals had or were formulating an integration scheme with physician organizations, nearly twice the proportion in 1993. (Burns et al, 2000). It was believed that combining the hospitals' and the physicians' organizations would not only decline the operational costs, but would also increase the efficiency of the industry. One major reason why professionals in the industry chose to integrate is to deal with manage care associations beneficially. Managed care plans enter into agreements with hospitals individually, where the hospitals are entitled to provide medical services to their customers. The choice of the hospitals they want to enter agreements with is often decided on the basis of the financial statistics. The managed care plans clearly have an upper hand, and they even get discounts from the hospitals. The hospital- physician integration scheme was essentially designed to offset the manage care plans and to extract better economic deals. ...Show more