Hospital Owned Practices Losing Thousands per Year
While the drive to move medical practices into hospital systems has continued to increase, especially in the Post-Affordable Care Act world, some research is showing that hospital acquisition of physician practices is correlating with loss in revenue, in some practices as much as $100,000 per year according to Fierce Practice Management.
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To read the full article, click Hospital Owned Practices Lose 100k Each Year.
The article points to a report from the Lexington Hearald-Leader in which the data on 26 healthcare executives representing 79 hospitals across a mix of rural and urban settings revealed:
- The longer a hospital owns physician groups, the higher the likelihood it is losing money on them.
- The more physicians a hospital employs, the more likely operating losses become.
- Physician groups operating as separate legal entities from hospitals have the highest losses, potentially because hospitals in these situations can lose control over operations.
The industry is moving toward more and more hospital groups acquiring physician practices and at this point any way it looks like this is doing nothing to solve medical practice financial problems.
The study’s results also shows “consisten[cy]with previous national research from the Medical Group Management Association, which found that hospital-owned practices are 25 percent less productive than those that are privately owned. According to that report, revenues may fail to reach their potential due to pitfalls of centralized billing, lack of physician incentives and lack of physician control.
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