Forming physician-hospital agreements

Physician-hospital agreements are often driven by the need to deliver lower cost, quality healthcare that provides patients with the best outcomes. This type of value-based health care is achieved when physicians and hospitals enter into co-management agreements. But what goes into forming physician-hospital agreements (learn more).

Physician-hospital agreements are also referred to as co-management, or medical directorship agreements. They are designed to improve the quality and efficiency of health care. Under these agreements, physicians assume a more active role in management. They perform administrative functions, and also take on supervisory responsibilities that relate to specific categories of service.

Reasons for physician-hospital agreements

Health care reforms in the US, have led to an increase in the number of co-management agreements between physicians and hospitals. The goal of improving the quality and consistency of patient care, now requires greater co-ordination among those involved in delivering health care. This type of alignment between hospital facilities and doctors, ensures the success of the health care system, and also reduces costs.

Physicians view these agreements as a way to stabilize income from decreasing reimbursement, and hospitals consider them a growth generation strategy. Health care providers, should always seek legal counsel to assist with negotiating and drafting of physician-hospital agreements. Legal advice is also needed to address potential issues that may arise in the event that the relationship has to be terminated for any reason.

As the healthcare landscape in the US continues to evolve, there is likely going to be many more co-management agreements being formulated.

If you are contemplating forming a physician-hospital agreement, be sure to seek legal counsel regarding the steps involved. At Nelson Hardiman, LLP, Los Angeles, CA, we assist clients in ensuring that these agreements meet the requisite state requirements. For more information call 310-203-2800, or send an email to

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