The HCV model is designed to be a major strategy for rebuilding the hospital-physician partnership. To regain and expand market share, hospitals and physicians together must adopt an aggressive patient-oriented stance that combines high-quality care and highly responsive service. Under the banner of “integration,” there have been numerous attempts to reduce healthcare costs and improve medical outcomes. But none of the proposed solutions has correctly aligned the interests of the many players involved in delivering healthcare.

The current models of “integrated systems” and physician practice management organizations respond to investors and government regulation, not patients’ interests. PHOs, MSOs and MCOs in many hospitals have focused on reducing costs and controlling physician behavior. Because physicians could not or would not invest in these solutions, they became employees of the system. Where physicians do not own or direct, they are not committed to making the models successful. 

The HCV is based on the philosophy that when physicians own and direct the enterprise, they have more control over healthcare delivery, provide consumers with options which patients prefer, gain autonomy in their medical practice, increase their fee-for-service revenue, and can participate in the financial rewards from services they use every day in the practice of medicine.

The HCV concept is the competitive alternative that hospitals have needed to respond to the threat from freestanding specialty facilities. Through the HCV, hospitals can now offer their medical staff the investment opportunities that physicians are seeking. The HCV’s short-stay “ambulatory hospital” is the centerpiece of the hospital-physician joint venture strategy. The ambulatory hospital will be programmed and custom-designed to meet local and community needs. The services offered will be those that can be successfully supported by the physicians of the HCV, and the surrounding medical community.

This Stark-compliant, non-tertiary facility will be licensed as a hospital with 20-50 beds for short-stay (72-hour) surgical recovery and OB with family-centered birthing. Unlike most traditional hospitals, services will be performed where they are needed most. Imaging and laboratory services will be located on the HCV campus, not a twenty-minute drive to the “medical center.”  Before the hospital is even built, the planning and research process will identify who will use the hospital, what services and procedures will be provided, what equipment will be needed, and how it will be owned and directed.

THE BUSINESS CASE: How the HealthCare Village Help Hospitals

The HCV is an economic partnership of the hospital and its physicians which will succeed due to physician loyalty, patient satisfaction, and better health outcomes. 

The HCV is designed to respond to the pressures facing hospitals today:

• Patients are often dissatisfied with their healthcare experience
• Hospitals are losing market share to outpatient specialty facilities
• Hospital-physician relationships are worsening
• Physicians are building their own ambulatory facilities, “skimming” the most profitable patients

Hospitals need a new physician relations strategy

In the process of designing the HealthCare Village, we interviewed over 2,000 physicians. From these interviews, it is clear that doctors are not getting what they need from their hospitals. Physicians today are searching for autonomy, both clinical and financial. Their financial goals are not being met. Managed care’s “hassle factors” are increasing physicians’ administrative costs, e.g.., insurance, scheduling, and collections. Hospital employment and Wall Street-backed physician practice management companies have been costly failures. Physicians want to refocus on their patients. The bottom line is that the HCV is a better business model and better practice site for its physician owner-partners.

The HCV offers hospitals a better competitive strategy to maintain and expand market share in the community. The short-stay ambulatory hospitals returns lost specialty procedures, and restores physician loyalty. The HCV is an effective counter-response to other investment opportunities now being offered to physicians by for profit competitors. In the HCV, physicians have an array of investment options, including ownership in the ambulatory hospital and surgical center, real estate, lab and imaging services.

HCV is a better capital solution

The HCV is a better Capital solution for hospitals. The Ward Group can bring “off-balance sheet” financing to the project at various levels, depending on the needs of the hospital sponsors. Shared ownership with physicians also reduces the hospital’s upfront costs. The ambulatory hospital can reach break-even and profitability more rapidly under the experienced management provided by Johnson & Johnson. Increased physician commitment can also drive volume and revenues, promoting financial success and increasing the financial contribution of the HCV to the hospital. Other fiscal benefits of the HCV include improving the payer mix with more fee-for-service business. The HCV can increase tertiary care referrals, and keep referrals “in the system.”

HCV is a growth opportunity

The HCV is an opportunity for the growth-oriented hospitals. Investment in the ambulatory hospital expands the hospital’s ambulatory volume and revenues. Sponsorship of the ambulatory hospital is available to hospitals, assuming they are willing to share the investment opportunity with physicians. There is also a facility naming opportunity for philanthropy or corporate partners. Hospitals can be charter members of the hospital and HCV governing boards. The real benefit of physician partnership to the hospital is that the doctors are in your deal, not their own or someone else’s.

HCV is a financial opportunity

The hospital’s financial benefits are increased ambulatory care revenues; the expansion can be financed with “off-balance sheet” capital. Financial risk is reduced by partnering with an experienced ambulatory center developer. The time to break-even is reduced. There are other financial benefits, from increased referrals to the hospital, and expanded brand-awareness which also drives increased volume. Ambulatory care is the growth sector of healthcare in the Millennium. Many hospitals will experience 50% of more revenues from the ambulatory side. And profits from the HCV can offset the hospital’s uncompensated care costs.

To summarize the hospital’s opportunities for investment side-by-side with physician in the HCV include:

• Hospital-owned centers of excellence for hospital-employed physicians, e.g.., primary care, pediatrics
• Short-stay ambulatory hospital – minority owner
• Information systems and technology – investor or joint-venture
• Allied and retail health services, eg., pharmacy, laboratory, imaging, men's’ and women's’ spa, health and fitness center – ownership or joint venture