Impending Death of Hospitals | The Business of Healthcare

Hospital Becomes Hole In Ground. ASC Takes Up The Slack.

In what might seem to some like ancient history and to others as a clarion call, in June 2010, New York City’s approximately 400 bed, 160 year old St. Vincent hospital, the last Roman Catholic general hospital in the city, closed its doors for the last time.

In late 2017, a competing non-profit opened the modern variant of a replacement “hospital” right across the street: a 6 O.R. ambulatory surgery center located in a facility with an emergency department, an imaging facility, physician offices, and other healthcare services.

Other than in respect of the freestanding emergency room, which, depending on state law may or may not be possible to license (or even wanted), there’s nothing in the concept of the replacement facility that couldn’t be created by you as a physician-led, physician-owned, for profit venture. In fact, it’s exactly along the lines of what I’ve termed a Massive Outpatient Center™:  A combination of an ASC, a medical office building, and one or more of a menu of complementary offerings.

For some, thinking becomes ossified along historic lines: “Hospitals build hospitals.” “Physicians just practice medicine.” “Physicians can’t own hospitals.” But none of these is necessarily true.  But, even if they were, opportunity is more malleable. What’s functionally like a hospital need not be a hospital.

If I were wrong about this, St. Vincent’s would be celebrating its 168th anniversary. It’s not. A 200-unit condo complex stands in its place.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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Employment | Employment-Hospital

Hospital Merged: Is Your Contract Purged?

I watched a clip from one of those shark shows. A shark was eating a shark.

That reminded me that hospital mergers are on the rise.

What will happen to your hospital contract or to your hospital employment relationship in the event the hospital merges? Will you still be the contract holder? Will you still have a job?

To the general public, the merger of two business entities appears to be the creation of a partnership of sorts. The reality is much different. One entity disappears into the other. Just like in the case of those sharks.

OK, you got me! Sure, we might be able to see the old hospital building standing there. It might remain open. (Or, it might be knocked down and turned into condos or maybe a Wal-Mart) But if it’s open, it’s now owned and controlled by the surviving merger “partner.” Setting aside the legal niceties, “we’ve merged with you” is simply the more polite way of saying “you’ve been acquired.”

So, what can you do in advance to reduce a degree of merger risk? Consider one or more of the following contracting deal points:

  1. Your contract will continue uninterrupted in the event of a merger.
  2. You will receive $X in the event your contract is interrupted due to merger.
  3. You have the right to terminate your contract in the event of a merger.
  4. The hospital will take all reasonable steps to assure that your group is the one providing X service at that location following a merger.

The complete list is longer and, depending on your circumstances, customizable.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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