Question:
You are working in the following health care marketplace. It is a mid-sized metropolitan market. There is a large population of urban poor.
There is an academic medical center that controls 80% of the inpatient hospital marketplace.
The other hospital in town is a small, faith-based, non-profit hospital. It is in financial distress. The hospital’s board is hopeful that the hospital can remain independent, but the board recognizes that the hospital’s finances must be improved quickly. The hospital is looking to capture lost market share by partnering with physicians who refer patients to a number of outpatient services such as clinical laboratory. It is hopeful of offering the physicians ownership interests in the facilities. The hospital does not have strong relationships with managed care plans. The chief financial officer of the hospital is considering how he can use the hospital’s profile as a lower cost provider to grow business volumes with insurers.
The academic medical center has approached the community hospital with a plan to acquire it and reconfigure its services, consolidating more intensive care at the larger facility and repurposing the community hospital to provide more routine care, preventative services and treatments targeted toward disadvantaged urban populations, with an emphasis on outpatient services and preventative care.
A large surgical group owns a freestanding surgical facility. The facility is successful, but does have some underutilized capacity. The current surgeon owners are split as to how best to grow their practice. Some members want to sell a portion of the equity in the surgical facility to either the community hospital or the academic medical center. Others are interested in recruiting other surgeons in the community to hold an ownership interest in the facility and utilize it for their own surgical patients. They are considering offering ownership interests in the facility based on physician’s projected utilization of the facility.
The Governor is concerned as to growing health care costs. The state has an aggressive CON program, but health care costs continue to rise. She is proposing legislation to establish caps on hospital rates for all payors.
The General Assembly recently passed legislation calling for all abortions to be performed in facilities meeting the public health code requirements for hospitals as a safety measure.
Consider the issues and opportunities before the various parties. You do not have to discuss each and every participant in the delivery system or identify every potential issue, but evaluate how you might advise some of the parties to proceed. What actions might make the most sense from their individual perspectives, and what are the pertinent public policy issues? What Constitutional, statutory or regulatory requirements might impact the actions of the various parties?
