Gainsharing

Abstract

In order to improve financial performance, hospitals in the United States are asking orthopaedic surgeons to participate in expense reduction programs. Gainsharing programs propose to offer physicians economic incentives to help hospitals to reduce costs. This essay provides definitions; describes the rationale and history as well as the support for, opposition to, and recent interest in gainsharing; and offers suggestions regarding the use of gainsharing programs to create mutually beneficial partnerships among physicians and hospitals. The genesis for this article was a strategic discussion by the Board of Directors of the American Association of Orthopaedic Surgeons on December 3, 2005, in Chicago, Illinois. At that meeting David Halsey, MD, William J. Robb III, MD, David Teuscher, MD, David A. Lovett, JD, and Richard N. Peterson, JD, presented information on gainsharing programs to the Board1-5. The opinions and commentary in this essay are solely from the author and do not represent official positions of the American Academy of Orthopaedic Surgeons or the American Association of Orthopaedic Surgeons. The basic concept of gainsharing is that hospitals and physicians work together to save money for hospitals, and hospitals share the savings with physicians. Gainsharing accepts and depends on the principle that physicians are uniquely qualified to improve quality and efficiency in hospitals and reduce waste and cost for hospitals. There is no standard, uniform definition of gainsharing, and a wide range of gainsharing programs have been described. Physician participation in gainsharing may involve the development and implementation of purchasing programs to reduce the hospital cost of supplies, devices, implants, and drugs. This activity directly reduces hospital costs. Physicians can also participate in multidisciplinary, cooperative hospital activities, such as developing clinical pathways, managing departmental budgets, directing supply-chain management programs, developing joint ventures for subspecialty care, building hospital pharmacy formularies, administering …