Physician gainsharing

From HMCwiki

Physician gainsharing refers to sharing cost savings with physicians resulting from improved supply utilization and standardization. Historically, hospitals had been prohibited from gain sharing by Stark Laws. However, in February of 2005, the OIG (Office of Inspector General) approved five gain sharing plans with characteristics of transparency and demonstrated results that certain levels of utilization (number of opened drapes in OR) or product standardization (Stent A vs Stent B) did not adversely impact patient outcomes. However, just because the OIG approves your gain sharing plan, that doesn't mean you won't be in violation of Stark and other Anti-kickback laws.

The recent HHS Inspector General ruling, which approved a restricted level of gain-sharing between hospitals and physicians who engage in cost reduction work, suggests that the environment for gaining physician compliance in cost savings is shifting in favor of the hospitals. Evidence of this shift is also suggested by the recent ruling of the U.S. Justice Department in subpoenaing several of the largest orthopedic manufacturers for information about the nature of the physician:vendor relationship.

Managing the physician:vendor relationship is a crucial component of reducing supply chain costs. A recent survey by the VHA hospital alliance revealed that vendor presence in the operating room can drastically increase the cost per case of knee and hip implants by approximately 12% per case. Given the current prevalence and persuasiveness of vendors in the operating room, this current practice can dramatically impact the cost position on a hospital. Therefore, hospitals must regulate this practice as they seek to control the rising costs of orthopedic surgery in the face of declining Medicare reimbursements.

Stepping between the physician and the supply vendor to achieve cost savings for the hospital is not an easy thing.

Successful strategies for managing this relationship include:

Providing Physicians with compelling data outlining the rapid increase in cost per case
Working with Physicians on standardization to decrease the number of vendors being use
Sharing information about declining reimbursements, not only for the hospital, but also, most notably, for the physician