Joint Venture Group Practices

Joint venture physician practices over-treat patients and reap economic rewards in the process. These types of practices are very different from the traditional group practices described in the text. Physicians partnered in traditional large group practices provide comparable services, usually practicing within the same specialty, such as Dermatology or Orthopedics. As Getzen (2010) explains, "One reason for physicians to work together in group practices is to obtain economies of scale from sharing office space, equipment, and information systems." (Getzen, 2010).The goal of these physicians groups are to increase revenue through sharing the expenses associated with ancillary help. The traditional group practice structure appears to uphold …show more content…
Joint venture practices, on the other hand, (either by their design or because of it) are under continuous scrutiny for just such practices. Joint venture practices are structured to provide ancillary services, a business structure much different than sharing ancillary help (as with traditional group practices). Under this structure, treating physicians set up their own 'in-house ' diagnostic and pathological laboratories and various types of treatment centers to provide patients with prescribed therapies. These joint venture practices are structured to provide patients with a virtual one stop doctor 's visit, no referrals needed, and, all services are rendered 'in-house '. Arguably, under this arrangement, the spirit of the AMA code of ethics against profiteering from patient treatment is completely desecrated, as the checks and balances of peer oversight has been removed. Still, legally, these kinds of practices are permitted, under Stark Law (Omnibus Budget Reconcilliation Act of 1989, 1989) because of the 'in-house ' structure of the businesses. …show more content…
At issue were five common, but not routine laboratory tests, and the frequency in which these tests were ordered in practices with in-house/on-site diagnostic/pathology laboratories as opposed to physician offices that used off-site or independent laboratory services. The data collected revealed that the panels of tests were performed at a rate of 64% in practices with in-house/on-site laboratories. By contrast, medical practices that used off-site laboratories order the same tests only 34% of the time. The estimated costs of these tests were $75 million per 100 million excess visits. A separate WSJ article (Weaver, 2012); explains the incentive for overusing anatomic pathology services. "At issue in the study is a quirk of billing for lab procedures. Labs get paid based on the number of jars used to hold specimens from a prostate biopsy. Doctors can choose to put several specimens in one jar, or put each in its own jar, potentially boosting lab fees, which average about $104 a jar in 2010, according to the