The Physician-Hospital Organization

Alexander, Vaughn and Burns (2000) define the physician-hospital organization or PHO as a legal (formal or informal) organization that bonds hospitals and attending medical providers developed for the purpose of contracting with managed care plans. Thus, the PHO is a system of health care financing and service delivery arrangements related to managed care. A key question that can be asked is whether PHOs are helping healthcare systems to succeed in an extremely competitive market? The answer to this question may be that some are being helped by a shift to PHOs while others are not, and thus while PHOs may not be "the answer" for all, they could well be "the answer" for some medical healthcare provider organizations.

According to Jaklevic (2002), there is currently a very strong push for health care providers to join some type of group if they are to succeed at managed care. He feels that while PHOs are not the total answer to the financial and competitive crises in the modern healthcare system, they do offer some advantages in terms of keeping healthcare organizations afloat and enabling certain physicians to practice medicine within an atmosphere of collaboration rather than conflict. Further, Jaklevic asserts that the PHO can be, under the right circumstances, highly profitable, and competitive.

Nonetheless, Alexander, Vaughn and Burns (2000) report that the research on PHOs has, at best, yielded varying levels of success. According to the aut

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