For-Profit Enterprise in Health Care (1986) / Chapter Skim
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3 Trends in the Growth of the Major Investor-Owned Hospital Companies
3 Trends in the Growth of the Major Investor-Owned Hospital Companies
Pages 250-259
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From page 250... ...
classifies as "short-term, general, and other special hospitals." Included are all such hospitals that were constructed, bought, leased, sold, merged, or closed between the inception of each company and the time of their 1984 filings with the Securities and Exchange Commission (SEC) .~ Our primary sources of information about these hospitals were the companies' annual reports and filings with the SEC, especially their 250 10-K reports.2 These reports, which must be filed annually by all publicly traded companies, are comprehensive statements that describe principal products and markets, the location and character of principal properties, a summary of the events of the previous fiscal year, and financial statements.
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From page 251... ...
The beds added through These activities account for 7 percent of the total number of beds owned by the six companies. The six companies completely replaced 11 percent of their facilities with newly constructed buildings.
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From page 253... ...
lYPES OF HOSPITALS ACQUIRED Previous Ownership Table 4 shows that these six companies have grown prunarily Trough the acquisition of other hospital chains (45 percent of all hospitals acquired) and independent proprietary hospitals (33 percent of all hospitals acquired)
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From page 254... ...
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From page 255... ...
For the six companies, the average size of the hospitals constructed (153 beds) was slightly larger than the size of hospitals purchased (though not smaller than leased hospitals)
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From page 256... ...
A third group of hospitals have been divested after 10 years or more of ownership. One can speculate that these are hospitals that have outlived their investment potential (i.e., TA;BLE 7 Divestitures of Short-Term General and Other Special Hospitals by Six Companies, Through 1984 Activity Total HCAa Humana AMI NME Republic Charter Total hospitals divested 87 26 39 14 3 0 5 Number sold 75 23 38 8 3 0 3 Number closed 10 3 1 6 0 0 2 Percent divested as percentage of total hospitals acquiredb 16 13 31 12 6 0 26 aHCA data are through 1983.
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From page 257... ...
~ Although significant geographic dispersal took place during the period studied, a high TABLE 9 Length of Time Between Acquisition and Div~ctitl~r~ far R7 Hn~nitolc C^1A ^' Closed by SLK Investor-Owned Hospital Companies,a 1970-1984 ~Kiev-~- TV vet Length of Time Total HCAb Humana AMI NME Republic Charter 1-3 yearsC 39 21 10 5 1 0 2 4-8 years 33 3 22 4 1 0 3 9 or more years 15 2 7 5 1 0 0 UTICA, Humana, AMI, NME, Republic, and Charter. bHCA data are through 1983.
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From page 258... ...
Sixteen percent of the hospitals built or purchased by these six companies had undergone a subsequent change in ownership. At the extreme, two examples were presented of hospitals Mat had changed hands five times after their initial purchase from local physician owners.
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From page 259... ...
Closure among U.S. community hospitals, 1976-1980.
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