Joseph Rugg's Health Law Blog

Many have argued, including the AMA and other physician professional associations, that the only criteria that should affect whether a physician is allowed to become a member of a hospital’s medical staff are quality of care, experience, and competence. So-called “economic credentialing” has been labeled a thinly veiled attempt by a hospital to increase referrals and utilization. In fact, even the OIG weighed in, stating (idiotically, I think) that if medical staff membership and hospital privileges have an economic value, then a hospital’s adding any sort of quid pro quo on the granting of privileges could constitute an illegal kickback scheme. Of course, the antitrust laws get trotted out as the last offensive gesture by the denied physician when economics are considered in credentialing decisions.

The world of healthcare is different today, and getting more and more different daily. But the direction that healthcare is taking is clear: accountability, cost-effective care, incentives to provide better care at the same time as providing less care. Quality, experience, and competence are assumed. And they are no longer enough.

Interestingly, economic credentialing is no longer the exclusive province of hospitals. It has become a tool of medical staffs to protect themselves from a hospital that is trying to acquire practices, grant exclusive arrangements to certain physicians, and otherwise control physician provided healthcare.

Physicians and their associations should get out in front of the economic credentialing debate while they still have time to make a difference.

For each new physican applicant, medical executive committees and their credentialing committees need to focus on utilization and admission and discharge histories, conflicts of interest, the need for the particular specialty (or for another physician who practices it) and the availability of hospital resources the accommodate ithe applucant, the applicant’s economic dependence or independence from the hospital administration, and the overall impact of the applicant on the mission of the hospital and the medical staff.

There is no downside to physician members of a hospital’s medical insisting that new applicants and re-applicants, not only be well qualified, experienced, and competent practitioners, but that they also promote efficient and economical healthcare.

Physicians must be willing, and not embarrassed, to treat the delivery of healthcare services as a business. Medical executive committees need to review their staff bylaws and consider changes to improve their medical staffs and to increase sensitivity to the economics of healthcare in the hospital setting.

Different states will have different laws relating to economic credentialing issues, and so, while the task is simple, it will not be easy in all cases.