Understanding Co-Management Arrangements

Key drivers, compensation structures and payouts, and performance metrics and target setting

As health care continues to shift its focus from volume to value, hospitals are implementing strategies to help strengthen hospital-physician alignment. Co-management arrangements are contractual agreements between hospitals and physicians that establish shared responsibility for particular service lines. These agreements are commonly structured with an even split between both base and incentive compensation components. Base compensation is tied to the number of management service hours required to fulfill baseline duties, while incentive compensation is linked to strategic performance measures.

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