ABSTRACT
Every hospital continuously seeks to strengthen its physician loyalty bonds by forming something, usually Physician Hospital Organizations (PHOs). PHOs are able to offer more enticement to Managed Care Organizations (MCOs) and employer groups who prefer to contract with a single entity for a full package of health services rather than draw up and maintain several contracts with various providers individually. If the PHO is self-administered, it must have an experienced management team capable of truly communicating with both the physicians and the hospital administrators, and have appropriate data integration systems and report-generation abilities. It may be inefficient for a small PHO to manage itself, as there may be goal conflict between the physicians and the hospital, resulting in confusion and anxiety among the participants in the group. Most often, these conflicts arise in the areas of financing, revenue allocation, administration style, subcontracts, carve-outs, and control.
