Arthur Andersen Healthcare Introduces Physician Gain Sharing Methodology.

ATLANTA--(BW HealthWire)--Aug. 11, 1998--

Groundbreaking Strategy Links Physicians and Hospitals in Successful Clinical Cost Savings/Process Improvement to Deliver Enhanced Patient Care

Arthur Andersen's Healthcare Group today announced it has developed a Physician Gain Sharing strategy to enable hospitals and physicians to resolve ongoing process and incentive issues, while improving patient care.

The breakthrough methodology decreases costs for clinical services, measures and improves treatment processes, and aligns the interests of physicians and hospitals. And it works because it enables the group who drives clinical costs, physicians, to share with the hospital in cost savings generated through joint initiatives.

Physician Gain Sharing provides an incentive arrangement for hospitals to work more cohesively with physicians via shared cost savings to develop new systems and protocols that deliver more effective care management in the hospital setting. "Gain Sharing potentially can be a less intrusive method of engaging doctors in clinical integration and process improvement," said Robert E. Wilson, healthcare consulting partner at Arthur Andersen. "This method enables physicians and systems to work in tandem to manage high-cost, high-volume service categories by implementing a system that evaluates its programs and creates appropriate incentives. Gain sharing is not about skimming hospital revenues and sharing them with physicians. This is a method for developing best practices at ground zero, then reaping the savings that result from provider collaboration." Physician Gain Sharing succeeds in uniting physicians and hospitals where other strategies have failed.

Gain sharing is ideal for transitional managed care markets where physicians are paid on fee schedules and hospitals on DRGs. Pilot efforts are in place among tertiary hospitals with a critical mass of patients in key service lines, such as cardiology, orthopedics, neurology, women's health services, and oncology.

The Gain Sharing Process

Arthur Andersen's approach to Physician Gain Sharing is a three-phased process in which each phase builds upon the previous, including Phase I: opportunity and capability assessment, Phase II: design, and Phase III: implementation.

Initiating the Physician Gain Sharing process requires a thorough assessment of the health system and providers that focus on opportunities for clinical and cost improvement. In addition, a capabilities evaluation of the participants measures leadership, clinical systems and data gathering to establish benchmarks that determine clinical goals and cost savings. The assessment should:

-- identify clinical problematic and opportunity areas for outcome or

cost improvement -- estimate potential system savings through high level benchmarking -- evaluate the system's financial tracking and cost measurement

capability -- analyze the system's clinical and qualitative measurement

capabilities, such as outcome data, and the resulting reports -- examine management's support in aligning the physicians and the

hospital in a collaborative effort -- evaluate the current relationship between physicians and the

system, and their willingness to collaborate -- identify existing foundations for a gain sharing program through

the existence of established clinical pathways or process improvement plans

Phase II of gain sharing delivers the design, providing clinical process improvement, cost tracking and compensation methodology. Participants determine the design by reviewing existing cost and outcome data on commonly performed procedures, benchmarking the results against external organizations considered "best-in-class," and identifying mechanisms for implementation. Cost and quality improvements to consider include technology enhancements, physician and technician training, as well as patient education.

Physician Gain Sharing implementation can be successfully executed after a thorough capabilities and opportunity assessment and a design process that involves both physicians and hospitals. Organizations launching a gain sharing effort around a single product line should budget approximately six months from physician buy-in to initiation of Phase III.

About Arthur Andersen

Arthur Andersen provides creative solutions for its clients through audit, tax, business advisory and specialty consulting services. Its professionals combine extensive technical competence and industry experience with innovative and progressive thought, enabling Arthur Andersen to exceed client expectations.

Arthur Andersen is part of Andersen Worldwide, the world's largest professional services provider. With more than 60,000 personnel in more than 78 countries, its global practice is conducted by member firms in 361 locations.

    CONTACT:  Arthur Andersen
               Mary Moak, 404/221-4336
               [e-mail]