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Developing a Physician-Hospital Organization (PHO) for a Community Hospital


A suburban community hospital in a health network that is clinically integrated for inpatient care and seeking to integrate professional services


To educate physician leaders to the value, activities, responsibilities, and governance of a PHO and develop interest and enthusiasm for this significant physician alignment initiative. Administration could clearly see the threat presented by an uncoordinated physician enterprise in this highly competitive region, but the independent physicians could not. It was critical to get physician buy-in at every step.


An interdisciplinary Steering Committee of physicians, hospital representatives, outside counsel and Veralon was created to agree on definitions and priorities. Veralon facilitated monthly planning sessions, educating the physicians about the current “accountable care” environment, and the possible roles and merits of a PHO for both the hospital and independent physicians.


Veralon developed a business plan for the PHO from which committee members could understand the resources a PHO would demand and what they could expect the PHO to achieve. The Committee reached consensus on the development of solicitation materials and an outreach plan to the medical staff.

Steering Committee members became well versed in the rationale for this initiative and able to speak to it in outreach efforts to medical staff colleagues. Next steps for developing committees and resource needs are now clearly spelled out, and the organization is ready for the operationalization phase of this significant initiative.