Physician organization is a term often used to describe numerous alternative organizations and organizational structures through which two or more physicians practice medicine or arrange to practice medicine.
The essential characteristics of physician organizations are: they are owned or controlled by physicians; and they are used by physicians to practice medicine or arrange to practice medicine.
There are three independent decisions that must be made to select and develop a specific physician organization:
• First, physicians must decide how much structural integration and operational integration is appropriate for their organization.
• Second, physicians should decide whether to: (1) separate the business operations (i.e., back office functions) from their medical practice by forming a separate organization to operate the back office; or (2) operate the medical practice and back office in the same organization.
• Third, physicians must choose the legal entity in which to operate the medical practice.
Excerpt from Jerry Peters, Medical Group Development For Physician Networks, AHLA Seminar Material.