According to Keagy & Thomas (2004) , if physicians develop closer relationships with community hospitals, they may benefit indirectly when the institution invests in new programs and equipment. The health care institution may contract the services of doctors because the scope of healthcare services has changed at the community level. The introduction of new equipment or programs may, therefore, warrant the services of licensed, professional physicians if they have good relations with the facility.
A physician-hospital organization's mutual relationship may serve as an advantageous plan for a community hospital because it maintains a balance between the facility and its staff ( Satiani & Vaccaro, 2010 ). Physicians do not have to worry about losing control over their practices because the contract clearly states that they have a significant part in all the decisions they make. Both parties get to take a share in the profits and losses generated by the facility, and as such, it serves as an equal platform for managing community hospitals. One side is not left to make all the decisions regarding patient care and service delivery. By creating a smooth transition between the hospital and the physicians, better outcomes are expected as the relationship is strengthened based on the decisions that are made by both parties.
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An equity relationship may also be of benefit to a community hospital because profits from the expansion will be shared between the institution and its physicians ( Keagy & Thomas, 2004 ). One of the main reasons as to why many healthcare facilities do not prosper in terms of performance and revenue generation is that they make all management decisions without considering the output of their medical practitioners. If they consider entering into an equity affiliation, they will end up getting all the support from the former, including creative and innovative ways of managing the institution and attracting more patients ( Satiani & Vaccaro, 2010 ). Sharing the risk through this model may, therefore, be beneficial for such institutions.
References
Keagy, B. A., & Thomas, M. S. (2004). Essentials of Physician Practice Management . New York, NY: John Wiley & Sons.
Satiani, B., & Vaccaro, P. (2010). A critical appraisal of physician-hospital integration models. Journal of vascular surgery , 51 (4), 1046-1053.
