Physicians must understand the potential impact of a growing trend.
Increasing financial pressure is causing both for-profit and nonprofit hospital chains to sell off their hospitals. How might this affect your practice, ranging from a minor inconvenience to the mooting of its, and even your, existence?
According to a report in Becker’s Healthcare News, for-profit health systems shed 81 hospitals over the past 12 months. A significant number were sold to nonprofit systems.
And, according to the same source, nonprofit hospital systems are also shedding facilities.
Buyers include both smaller, regional systems, both for-profit and nonprofit, the latter category including academic medical centers, notably those owned by state governments, such those operated by the University of California: UCLA Health purchased a 260-bed HCA facility. UC Irvine Health is buying four Tenet hospitals, And UC San Francisco Health is in the process of taking on two facilities from Dignity.
For physicians dependent upon a contractual relationship with the hospital at which they practice, this means all hospital-based physicians and many office-based physicians, the sale of the hospital often triggers an immediate termination of the contractual arrangement. And even if it doesn’t, it will certainly affect the terms of the next agreement, if it is awarded to you, once your current contract expires.
Employed physicians, who thought that employment was safer than private practice, might be surprised to find out that their employer no longer needs them. Welcome back to private practice, with no patients, no front or back office support, no nothing other than perhaps a couple of framed diplomas
And, last, for all physicians, referral patterns will be impacted, especially in connection with acquisitions of community hospitals by academic medical centers. The community facilities will be part of the funnel into the academic ecosystem of which you might not play a part.
At least hospital-based groups have more opportunity to gain control over their future. On the one hand, this includes focusing carefully on the terms of the agreements they negotiate with facilities, and it also includes spreading business risk over multiple facilities, meaning over multiple facilities not controlled by the same system owner.
