For-Profit Enterprise in Health Care (1986) / Chapter Skim
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2 Changes in Ownership, Control, and Configuration
2 Changes in Ownership, Control, and Configuration
Pages 26-46
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From page 26... ...
Hospitals and multihospital systems have moved into other types of health services (primary care centers; ambulatory surgery, diagnostic, and rehabilitation centers; nursing homes; and home health services)
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From page 27... ...
The growth of multi-institutional systems, which widen the pool of administrative and managerial expertise on which indiviclual institutions can draw, was undoubtedly stimulated in part by the difficulties of individual institutions in coping with an increasingly complex regulatory and reimbursement environment. Over developments, such as a recent wave of hospital expansion into nursing homes, and home and psychiatric care, can be attributed to the changed economic incentives resulting from Medicare's shift from costbased reimbursement to a fixed, per-case payment.
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From page 28... ...
bNonfederal short-term general and other special hospitals. SOURCES: Calculated from data from: Federation of American Hospitals: Directory of Investor-Owned Hospitals and Management Companies, 1975; Stabstical Profile ofthe Investor-Owned Hospital Industry, 1979 and 1980; Statistical Profile of the Investor-Owned Industry, 1983; 1965 Directory, Investor-Owned Hospitals and Hospital Management Companies.
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SOURCE: American Hospital Association, Data Book on Multihospital Systems 198(}1981; Data Book on Multihospital Systems, 198~1985.
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SOURCES: American Hospital Association, Data Book on Multihospital Systems, 198~1985; Federation of American Hospitals, calculated from data from Statistical Profile of the Investor-Owned Hospital Industry, 1983. for-profit systems.
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. lvllSSlSslppl Missouri Montana 29 11 12 16 31 10 2 13 8 44 29 6 5 10 3 23 31 7 Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota to Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota 4 r ~ ennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin 12 Wyoming 2 50 3 10 o 18 o 1 9 13 4 5 o 21 38 32 20 o 31 11 aInvestor~wned is defined as owned by a corporation that owns or manages three or more hospitals; includes psychiatric and other speciality hospitals SOURCES: Calculated from data from American Hospital Association (1984~; Federation of American Hospitals (1984~.
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From page 32... ...
Three of the four are primariTy hospital chains-Hospital Corporation of America, National Medical Enterprises, and Charter Medical. The fourth is Community Psychiatric Centers, which owns no acute care hospitals.
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From page 33... ...
together operated approximately 1,500 homes comprising about 70 percent of the investorowned nursing homes identified by Modern Healthcare (Punch, 19851. Multi-institutional system growth among not-for-profit nursing homes has lagged substantiaDy behind the investor-owned sector.
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From page 34... ...
Home care services comprise a broad and increasing range of services provided by several different types of personnelaDiliated with thousands of home health agencies. Types of care include skilled nursing, occupational speech and physical therapy, meals, homemaker services, respiratory therapy, and intravenous therapy.
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From page 35... ...
The nursing home subsidiary of National Medical Enterprises provided home care in 21 locations in 1984, and Beverly Enterprises, a large nursing home chain, had 134 home care units in 1984. Hospital Corporation of America and American Medical International both entered the home care field in 1984 (Kuntz, 1984; Fackelman, 1985b)
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From page 36... ...
Growth was slow through the mid-1970s, but by 1980, 128 ambulatory surgery centers were counted nationally. A private market research firm estimates that 114 new freestanding surgery centers will become operational in 1985, for a total of 428 such facilities (see Table 2.9)
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From page 37... ...
Today they are increasingly owned wholly or in part by hospitals or hospital chains, and they now typically style themselves as urgent care or primary care centers rather than emergency centers, their original appellation. The name change is in part a response to the criticism that patients in need of emergency care, such as victims of major trauma or patients suffering heart attacks, would inappropriately seek care in "emergency" centers, which generally are not equipped or staffed to handle such cases, rather than in hospitals.
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From page 38... ...
P Rehab, which owns cardiac rehabilitation centers; Rehab Hospital Services; Vari-Care Inc., a nursing home company that has established rehabilitation programs; and Diagnostic Centers Inc., a subsidiary of Omnimedical, designed to set up diagnostic radiology centers throughout the United States.
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From page 39... ...
Movement to encompass other levels of care is commonly called vertical integration, because it entails care that often precedes or follows hospitalization (e.g., primary care; after-hospital care in the patient's home, nursing home, and other sites; and other services)
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From page 40... ...
The eight largest investor-owned hospital corporations combined present an interesting picture of vertical integration. In 1983 they owned and operated the following (Federation of American Hospitals, Hospital Management Company Facilities by Line of Business, unpublished data, 19841: 426 acute care hospitals 102 psychiatric hospitals 234 hospital management contracts 163 medical office buildings 89 ambulatory care centers 34 substance abuse/alcohol centers 272 long-term-care units 38 home health agencies 62 dialysis centers 32 clinics 103 pharmacies 3 radiology units 2 medical laboratories 1 freestanding diagnostic center.
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From page 41... ...
Among not-for-profit hospitals and systems, some vertical integration and diversification efforts have been facilitated by membership in alliances such as American Healthcare Systems and Voluntary Hospitals of America. The latter has developed a design for ambulatory surgery centers to reduce construction and operating costs for its members and has created VHA Health Ventures-to help members vertically integrate, and Voluntary Health Enterprisesto give members engaged in diversification activities access to equity markets (Voluntary Hospitals of America, undated)
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From page 42... ...
There are no data available on the number of not-for-profit hospital corporations with for-profit subsidiaries, but examples are legion. One is Roanoke Memorial Hospital Association, which operates for-profit subsidiaries that include a collection agency, a long-term-care center, an air ambulance service, and widely dispersed real estate operations (Kidwell, 1983~.
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A 1984 American Hospital Association survey of hospitals regarding 10 types of jolt ventures found that 12 percent of hospitals had such ventures. The most frequently reported type was for preferred provider organizations.
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National Medical Enterprises acquired almost all of its psychiatric hospitals when it bought Psychiatric Institutes of America in 1982 (Levenson, 1983~. 51he following discussion of nursing homes is derived from Hawes and Phillips (1986~.
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From page 45... ...
For-profits Adding Home Healthcare to Aid Bottom Lines. Modern Healthcare 14(May 15~:168-184.
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From page 46... ...
Stock Deal Finances VHA Fields. Modern Healthcare 14(June)
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