Lessons learned from three physician-equity models.

Abstract

To improve the profitability of group practice ownership, some healthcare organizations have structured arrangements to include a form of physician equity. An equity incentive is designed to encourage physician behavior that supports business operations by tying financial reward to overall organizational performance. Three physician-equity models--third-party integration, joint venture management services organization (MSO), and physician-owned practice management company--have used the physician equity incentive with varying degrees of success. The experiences of three healthcare systems that implemented these models demonstrates that strategies often cannot be executed as planned, growth should not be assumed, and the changing healthcare marketplace is unpredictable.