Beth Israel looking to set up ventures with doctors in bid to stay competitive

The 750 Harvard-affiliated doctors who research disease and treat patients at Beth Israel Deaconess Medical Center are getting in touch with their entrepreneurial side.

A new corporate structure being adopted Oct. 1 by the doctors' group, Harvard Medical Faculty Physicians, will allow them to set up outpatient surgical centers and other joint ventures with the hospital.

Beth Israel Deaconess executives expect the move will keep the hospital competitive and help it recruit top-ranked physicians.

Hospital officials said there are no plans yet for new facilities, but that discussions will begin later this fall. ``It opens up a real partnership opportunity," said Dr. Stuart A. Rosenberg , chief executive of the physicians group.

The change removes the doctors from obligations under CareGroup, the former Beth Israel Deaconess network, which still exists on paper and has more than $581 million in bond debt. Under the new arrangement, the physicians will be free to enter business pacts with Beth Israel Deaconess.

``It gets rid of some resentment that existed before in the CareGroup framework," said Paul Levy, the hospital's chief executive. ``CareGroup is just a holding company that has debt."

Moody's Investors Service Inc. said the change will have no effect on the CareGroup bond rating, and said the deal has ``positive ramifications" for the system. In addition to Beth Israel Deaconess, New England Baptist Hospital and Mount Auburn Hospital are still responsible for CareGroup bonds.

The move by Beth Israel Deaconess reflects similar efforts around the country to find ways to make stodgy academic medical centers perform more like nimble, competitive businesses.

Such hospitals are opening more outpatient cardiac centers, orthopedic centers, and cancer centers, said Marc Bard, chief executive of Bard Group, a Newton consulting firm that specializes in business relationships between hospitals and doctors.

``It's not so much that doctors want to invest in ambulatory surgery centers. What they are looking for first and foremost is operational efficiency," he said. ``Whether they can do four or five or six knees in a given block of time matters to their bottom line in a very significant way."

That can help attract doctors to a large academic medical center like Beth Israel Deaconess, which cannot operate as efficiently as an outpatient center. That is especially important when the hospital is located in the middle of one of the country's most expensive housing markets.

``What's unique about Boston is that the ratio of cost of living to earning capacity in academic medicine is among the most unfavorable in the country," Bard said.

Christopher Rowland can be reached at crowland@globe.com.