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Difference between an IDS and a typical hospital

An IDS is a coordinated network of various healthcare providers, including hospitals, physicians, skilled nursing facility providers, and ancillary services, to provide a full spectrum of healthcare services for patients. A true IDS has a legal structure that enables it to bill for and collect the payments for the services across the full continuum of healthcare services. An IDS is able to structure compensation methods for physicians differently, making it more economically efficient. A typical hospital, on the other hand, is fragmented. The physicians are separate, and other ancillary providers are free-standing and bill for and collect for their own services as well.

More IDS or fewer?

More IDS because healthcare consolidation has been taking place for some time now and is well established. With consolidation comes integration in healthcare, which aims to achieve cost savings, enhanced profitability, and improved patient outcomes. The Accountable Care Act is driving the integration trend. Declining reimbursements and the uncertainty over healthcare reforms are pushing physicians towards integration, which is a ‘safe harbor’ of employment

Language differences in the body and appendix of a contract

Some of the contractual languages used when designing a contract are the same for all types of providers, and other terms only apply to specific providers. Clauses that change less frequently or those that are not expected to change at all are placed in the body of the contract. Certain terms, such as payment terms and dollar amounts, are usually subject to periodic change and so are usually placed in the appendix of the contract. This is advantageous in that it allows for the renegotiation of the contract without having to open the rest of the contract making it less tedious.

Why ACOs Fail

ACOs fail because of the data. Many organizations have used electronic medical records for quite some time, but they haven’t really taken a look at the results for quality measures. The lack of proper documentation and data availability has resulted in decreased compliance. Doctors lacked proper data to show what they were doing to achieve the capitation goals and manage their practices better, so they ended up overspending.


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Homework Read chapter 4 and answer these questions in your own words using the text or references from the internet:

  • What is the difference between an IDS and a typical hospital?
  • What do you predict will happen in the future – more IDS or fewer? AND WHY?
  • Why is language in the appendix of a contract different from what is in the body of the contract? What is the advantage of this?
  • ACOs have failed… why?

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