Creating a group with a single tax identification number, as detailed below, facilitates physician involvement in governance, enhances managed care contracting clout and creates a platform for improving clinical outcomes through shared information systems. Physicians find a hospital partner. In this step, physicians ideally focus on a potential hospital partner where most physicians' patients are hospitalized. Most commercial managed care plans budget dollars equally for the hospital component of a premium as the combination of the premium dollars allocated for the professional component of primary and subspecialist physicians. Participating in risk pools that cover both the hospital and physician components is important to clinical management and economic reward.
Physicians create a new organization.
Physicians create a single tax identification entity and transfer title during the initial capitalization and start-up. Because the physician group and MSO both need funds to start a practice, each physician owner must contribute to the funding with cash, practice, assets or a combination of the two. Dr. Young situation's is different from that of Dr. Hardtz. The hospital, in turn, provides cash to fund the MSO's start-up. The medical group and hospital would then each have an equal number of board members.