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Local PHO Planning in a Competitive Regional Network


Community hospital in a competitive suburban market


Develop the legal and organizational framework for a Physician Hospital Organization (PHO) and build support to attract voluntary physicians and pursue clinical integration. While meeting the needs of hospital and physician stakeholders, Veralon also had to lay groundwork for potential regional clinical integration initiatives with other hospitals and physicians across the region.


Veralon and legal counsel facilitated a series of meetings with a steering committee of representative independent physician leaders and hospital administrators. Veralon worked closely with legal counsel to explain and accommodate legal constraints. The steering committee was developed to build trust, define an understanding of clinical integration, and develop a shared vision of PHO achievements.
Through a series of working sessions steering committee members reached consensus on:

  • An operational plan for PHO activities, including value added services to physician members and clinical integration;
  • Business planning structure and tradeoffs; and
  • Solicitation strategy for gaining physician members.

The PHO’s organizational and governance structure was developed to accommodate legal constraints while also achieve the PHO’s business goals defined by the steering committee.


Through the steering committee meetings, physicians played an active role in shaping the PHO and gained a clear understanding of its business functions and the legal parameters. After these meetings, steering committee physicians spoke in public and private to independent medical staff colleagues and regularly advocated for the PHO and were able to answer their colleagues’ questions.

Through this process, the hospital and steering committee successfully solicited physician membership in the PHO and developed an initiative that served as a model for regional initiatives at other institutions.