For additional information on the current state of surgery center valuation, read “4 Top Issues Facing Hospital and ASC Valuation.”
2. Physician-owned hospitals continue to be targeted. Physician-owned hospitals, which are gaining a reprieve as the main healthcare bills have stalled, should not take too much comfort. We expect that the House and Senate will continue to target physician-owned hospitals and that the President will remain unsympathetic to their plight. Thus, it remains a good time to look very closely at long-term options for physician-owned hospitals, whether existing hospitals or those that are under development. For those under development, we advise that hospitals pay the extra money to contractors and labor, if possible, to assure that the facilities get opened as soon as possible.
There were several concepts in the bills that were set forward that would have had an immediate impact on existing physician owned hospitals. These concepts include that a facility could not condition ownership on any level of referrals to the facility, that a hospital must notify patients if it will not have physician on staff 24/7, as well as a few other concepts, and it will require action the day such a bill is enacted. Some of these actions may involve amending the operating agreement and bylaws of a facility. Other concepts such as prohibiting the expansion of operating rooms, procedures rooms and beds were also quite rigid as drafted and draconian.
For additional information on the future of physician-owned hospitals, read “As Health Reform Struggles, Ban on Physician-Owned Hospitals Faces Uncertain Future.”
3. Hospitals focus on service-line dominance and physician alignment. Leading hospitals continue to really focus on a number of service lines and assuring that in addition to general depth that the hospital can absolutely excel and be considered the lead provider in certain key areas. Hospitals also continue to move forward with aggressive physician-alignment strategies. Increasingly, these strategies revolve around acquiring and employing physician practices. This gives hospitals greater comfort — at the risk of higher operating expenses and debt — that physician cases will continue to come to their hospitals. At the same time, this increased emphasis on employment provides challenges for physician-owned facilities and independent practices. Finally, we expect that hospital/payor negotiations will get much more difficult over the next couple years as employers look to payors to reign in healthcare costs.
For additional information on the increasing acceleration of physician/hospital relationships, read “Accelerating Physician-Hospital Collaboration,” a white paper jointly authored by Sg2, a leading healthcare consulting firm, and McGuireWoods. To obtain a copy, contact Scott Becker at sbecker@mcguirewoods.com.
4. Healthcare vs. insurance reform. Healthcare reform itself has become so polarizing, based on the number of missteps and over reaches by the Senate and House, that it will be very interesting to see whether any level of healthcare (or what should possibly be focused on certain aspects of insurance reform) can be accomplished this year. Healthcare costs remain a problem for many in this economy, and the inability to gain coverage if you have a pre-existing condition is a grave problem.
For additional information on the current state of healthcare reform, read “Republican Wins Senate Seat in Massachusetts: 8 Quick Thoughts by Scott Becker.”
