Economically flawed' The approach many hospitals took to buy and operate physician practices made no economic sense, according to Thomas Dennison, a Syracuse University professor and health-care expert. Then the physician's productivity goes down, their performance goes down and they are making the same amount of money or more. So economically, it's a flawed approach. After paying big purchase prices, hospitals often couldn't get enough revenue out of the practices to recoup their investments. Another mistake hospitals made was thinking they could successfully manage doctors' practices, according to John Pennisi, owner of Medical Management Resource Inc., a DeWitt corporation that handles billing and accounts for medical practices.
Physician practices are very complex to manage.
Hospitals are not expert at managing physician practices. They are expert at running hospitals. Of the six primary care practices St. Joseph's operates, three were purchased from physicians and three were started from scratch by the hospital. St. Joseph's sold the practices three years ago to St. Joseph Physician Health P.C., a corporation affiliated with the hospital. Dr. Robert Friedman, a hospital vice president, owns the corporation.