U doctors to create practice group

by Joel Sawyer

University Medical School officials are setting the foundation for what will be one of the largest and most comprehensive medical practice groups in the Midwest.
Last month, Medical School faculty members overwhelmingly voted to create a single multispecialty Faculty Practice Organization, which will represent more than 430 University physicians who now belong to 18 individual department practice groups.
Practice group organizations help administer the private clinical practices of physicians. They consist of doctors and administrative staff members who take care of billing and negotiating medical service contracts.
Through the consolidated organization, University physicians will provide health care services to Twin Cities hospitals, including the proposed Fairview-University medical center. The new medical center would be the result of the proposed merger between University Hospital and Fairview Health System.
Howard Schur, an administrator in charge of practice-plan oversight in the dean’s office of the Medical School, said the Medical School’s 18-group consolidation will enable them to operate more efficiently in a competitive health care marketplace.
Medical School officials say the consolidation will reduce administrative costs and foster better collaboration between Medical School departments.
Before the organization can begin operations, service contracts must be negotiated with the Medical School, Fairview Health System and other hospitals and clinics.
Pete Mitsch, project manager for the University Hospital-Fairview Health System merger, said officials from the University and Fairview have always looked at the organization as an important part of their merger agreement.
“We’ve always approached this as a three-way relationship” between the Faculty Practice Organization, Fairview and the University, he said.
Mitsch added that if an agreement between the organization and Fairview could not be worked out, it was not likely the merger would continue. But he said officials anticipate that a contract between the organization and Fairview will exist.
The organization should sign agreements with the University and Fairview within 60 days, Mitsch said. The merger between the University and Fairview is expected to be finalized by Sept. 30.
The task of negotiating agreements between the Medical School and Fairview will be handled by the University of Minnesota Clinical Associates, which currently administers the 18 practice groups.
After contracts are finalized and the consolidated practice group begins operation, the University clinical associates will give control of administrative duties to the new practice group.
The organization, which is expected to begin operations in January 1997, will remain a distinct entity affiliated with the Medical School. In the next few months the University’s 18 practice groups will elect a board of directors and begin consolidating.