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Hospital – Surgeon Gain Sharing Programs: Considerations and Cautions

Posted by Tom Blasco, M.D. on Nov 8, 2018 2:08:29 PM
Tom Blasco, M.D.

Facing the daunting challenge of intense competition and the ever-increasing demands of value-based care, hospitals are exploring a wide variety of approaches to improving both quality and efficiency.

Gain sharing has long been a proven winner in aligning incentives, producing high value, patient friendly services. Indeed, the free-standing surgeon-owned ASC, is the time tested "poster child" of successful gain sharing.

However, unlike the Stark ‘safe harbor’ regulation that permits ASC gain sharing, building a similar program between surgeons and hospital is more challenging:

  • There is a long history of limited collaboration between surgeons and hospitals, even with the current physician employment trend.
  • Whether it’s direct payment from the hospital or part of a bundling program, staying within the regulations can be difficult. Avoiding penalties caused by a violation of the Anti-Kickback Statute and Civil Monetary Penalty Law requires careful design and coordination with appropriate legal counsel.
  • Hospital-based gain sharing is still in its infancy with most surgeons not seeing significant long-term gain with their participation.

Despite these issues, hospital-based gain sharing will likely continue to expand.  To ensure patient safety and high-quality of care, successful gain sharing efforts require ongoing metrics/analytics that measure not just cost but also quality, and patient satisfaction.

Building a hospital-surgeon gain sharing program should include the following steps:

  • Start with a collaborative vision. Identifying surgeons willing to participate is essential for a successful rollout. Providing these motivated volunteers with the appropriate support, best practice clinical pathways and analytics will help to guarantee successful implementation.
  • Building a dedicated team, with each member (when possible), receiving incentive payments, along with the surgeons. For example, anesthesiologists, hospitalists, etc., can be extremely effective members of a gain sharing team.
  • Gain sharing incentive must be based on both cost reduction and improved patient care. Selecting for patient complexity or limiting the program to ‘select’ surgeons should not be part of the program.
  • Building, implementing and measuring best practice patient care process is the foundation of successful hospital gain sharing. This is where a multi-disciplinary team approach is important.  Defining best practice can be facilitated with a review of the market and may include visits to successful programs.
  • Establishing the thresholds for incentives usually include both cost reduction metrics and best practice performance, weighted 50:50. For example, for a total hip replacement program, a defined cost reduction threshold as well as adoption of best practice process, including measurement of surgical site infection rates, 30-day readmission, and patient satisfaction could be part of the program.

In summary, gain sharing can be a major part of a hospital effort to improve the value of its services. While gain sharing is not without legal risks, a carefully designed and measured program can reduce costs, while improving the overall quality of care.

Achieving surgeon (and team) buy-in is usually the hardest initial obstacle to overcome.  Building and implementing a surgical best practice model, requires a team approach with careful attention to gathering and distributing the appropriated data/analytics.

Aligning incentives of surgeons and hospitals with gain sharing, can overcome the century-old operating room culture.

Note:  Every situation is unique. If your hospital is considering gain sharing, be sure to engage with your legal and administrative teams to help determine if it is appropriate in your situation.

Tags: Value-based incentive payment, Value Based Payments, analytics, Productivity, Value-based care, Gain Sharing, ASC gain sharing, Bundle payments, Bundling program

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