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Published byJulia Parker Modified over 11 years ago
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1 The BayCare Experience: Physician Joint Ventures Paul R. Summerside, MD Chief Medical Officer BayCare Clinic, LLP President, Board of Managers BayCare Aurora, LLC
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Aurora BayCare Medical Center (ABMC) ABMC is an acute care hospital that opened in 2001 Joint Venture of BayCare Clinic (a physician partnership) and Aurora Health Care (a not-for-profit organization) 40% Physician ownership 167 Beds including the following services: - General Medical and Surgical- Womens Health - Adult ICU/eICU- Obstetrics - Cardiovascular- Level III Neo-natal ICU - Neuroscience- Pediatric Inpatient - Orthopedic- Inpatient Rehabilitation - Emergency Services including a Level II Trauma Center- Oncology Located in Green Bay, Wisconsin 1,100 employees Operates under the Planetree philosophy: patient centered care in a healing environment
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BayCare History 1996 - Independent Specialty Practices Form MSO 1998 - Letter of Intent w/ AHC 1999 - Integration of MSO to BayCare Clinic 1999 - Finalize JV Operating Agreement 2000 - Break Ground on ABMC Hospital 9/01 - Opening ABMC Tertiary Hospital 2003 - ABMC Reaches Calendar Year Profitability 2004 - ABMC Pays off Operating Line and Accumulates Cash Reserve 2007 - ABMC 5 th Consecutive year w/ > 12% margin and begins seventh expansion
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Joint Ventures….Why? –Am I in trouble? –Am I at risk? –Will I be at risk? Risk Avoidance = 10x Pleasure Pursuit
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Change
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1.Fixed Costs 2.Physician Loyalty 3.Capital Needs 4.Regulatory Concerns 5.Safety/Quality 6.Payor Mix Risk Hospital System Anxieties
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Maslows Hierarchy of Needs Understanding Motivation
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1.Loss of lifestyle 2.Loss of Control 3.Loss of Colleagues 4.Loss of Respect Physician Fears/Needs
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0Volume $ Millions LOSS COST PROFIT REVENUE Hospital Finance
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0Volume $ Thousands LOSS COST PROFIT REVENUE Physician Finance
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0Volume $ Thousands LOSS COST PROFIT I MoveI Stay Risk Corridor REVENUE Physician
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0Volume $ Millions LOSS COST PROFIT Ortho HappyOrtho Sad Risk Corridor REVENUE Hospital Finance Fears
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Institutional: Greatest Good for the Greatest Number (Missions) Physician: My Income, My Overhead, My Time, My Patients (Goals) Clash of Cultural Values
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Reliance on benevolent dictatorships w/ a Mission Psst… remember RESPECT and Control! Physician Fears…
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--Eric Berkowitz Physician/Hospital Engagement
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The Renter vs. Owner
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Neurological Spine Costs Among Six Centers
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Key personnel like each other; Understanding partners cultural values; Respect of partners value; Willingness to relinquish control. (If you love them, set them free!) Keys to Successful Join Ventures
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If you want to be a lion tamer…. you better at least like the animals.
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People will do what you ask if they perceive that doing what you seek will serve what it is that they personally value. --Dwyer The Value Proposition
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Hospital System Anxieties Fixed Costs Physician Loyalty Capital Regulatory Safety/Quality Payor Mix Risk Loss of Profitability and Mission Physician Anxieties Loss Lifestyle Loss of Control/Quality Loss of Colleagues Loss of Respect Aligning Incentives (Fears!)
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Ownership 40% BayCare Physicians 60% Aurora All Stark Controlled Revenues in the JV Governance (MAD) Board Five Aurora and Five BayCare 70% Super Majority Rule Partner Veto all Self-Dealing Non-competition BayCare Aurora Experiment
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Results: –BayCare Clinic 1999 – 53 specialists »$44 million net collections 2007 – 100 specialists »40 physician extenders »$105 million net collections BayCare Aurora Experiment
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BayCare Aurora LLC 1999 – Two Surgery Centers »$8 million gross revenues 2007 – Tertiary Hospital System »$200 million gross revenues »Largest Taxpayer in County BayCare Aurora Experiment
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IP and OP Discharges Since 2002
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* Source: Aurora Loyalty Index Data Through Q2 2007 Patient Satisfaction – Inpatient Services
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* Source: Aurora Loyalty Index Data Through Q2 2007 Patient Satisfaction – Outpatient Ambulatory
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In the Absence of a Great Dream… Pettiness Prevails. --Peter Senge
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