The month of November marks an important milestone in the integration of disciplines separated by traditional departmental boundaries. The Research Council has provided a model multidisciplinary approach to enhance our investigative activities, and several Centers of Excellence have integrated multidisciplinary care to further our clinical mission. Inauguration of the final phase of the Brigham and Women's Physicians Organization represents a logical step toward economic integration, an important theme of our evolving health care system.
The BWPO has been created to provide a legally constituted aggregate voice for BWH physicians as part of Partners Healthcare System, to communicate in concert to payors to seek reimbursement at a level sufficient to cover our costs. Payments must include adequate funds to fairly compensate our high caliber staff and to recapitalize our physical plant. The initial "Phase I" PO structure greatly facilitated our negotiations with Blue Cross/Blue Shield a year ago regarding Access Blue, and more recently resulted in successful negotiations that achieved the first increase in physician payments in a decade. This increase should help to defray rising practice expenses. Enhanced reimbursement for the institutions across PHS will allow us to reach a healthier financial margin over the next few years. The strong stand taken with regard to current Tufts negotiations, and inevitably with HPHC, will help sustain our ability to deliver the high quality of care expected by our patients and staff.
Phase I of the BWPO, however, does not provide optimal antitrust and liability protection. We need to move on to a completely integrated structure to enhance maximum legal protection from antitrust litigation. Litigation is neither hypothetical nor unprecedented as third party payers have successfully sued physician groups of various configurations in this and several other states. Our Attorney General is closely monitoring the Tufts negotiations and has expressed an interest in the forthcoming HPHC negotiations.
This consolidation does come at increased cost. Partners and BWH have provided more than eight million dollars to defray start-up expenses incurred for information systems, finance, human resources and patient accounting functions. The incremental operational cost to the foundations has been estimated at an average of 1.3% of net revenue ($1.5 M total for all seven foundations), after consolidating appropriate foundation expenses to achieve economies of scale. Nevertheless, the increased clinical revenue gained from the recent Blue Cross/Blue Shield contract is expected to provide an increase in net revenue of 3.2% or
Individual departments will retain their ability to make a selection of benefits from a menu designed to replicate their existing benefits as closely as possible. The chair of each department also retains authority over distribution of clinical revenues derived from members’ activities. The Department Chair will continue to exercise jurisdiction over these critical areas.
Finally, the BWPO is, in fact, an organization governed by physicians. At present, there are 28 members of the Board of Trustees, of which 21 are physicians. In November, we anticipate adding two new departments to the PO, which will add two additional physicians who are voting trustees. The Executive Committee consists of 16 Trustees, 12 of whom are voting members, 14 of whom are physicians (as mentioned, two additional physicians are expected to be added as voting members in November). The standing committees consist of Trustees and additional members of the medical staff with specific interest and expertise, and are provided ample opportunity to interact with both the Executive Committee and the full Board.
Chief Medical Officer