Although for some, 2011 will be remembered locally as the year Mayor Daley left office, for those in healthcare it will be remembered for the tsunami of hospital purchases and mergers that swept across the area. Consider this:
- Loyola University Health System (including Loyola University Medical Center) sold to Trinity Health in March.
- Alexian Brothers Medical Center (Elk Grove) and St. Alexius Medical Center (Hoffman Estates) sold to St. Louis bases Ascension Health in April
- Provena Health merged with Resurrection Health Care forming the largest Catholic healthcare system in Illinois (12 hospitals with more than 150 sites of care).
- Trinity Health acquired Mercy Hospital & Medical Center (479-bed hospital and 11 clinics) in September.
- Northwestern Memorial Hospital is currently in exclusive "merger" talks with Elmhurst Memorial Healthcare
- It is rumored that Northwest Community Healthcare may be sold in 2012 and there are many questioning how long Edward Hospital and Health Services (Naperville) and Palos Community Hospital (Palos Hills) can remain independent.
With inpatient hospitalization continuing to decline, hospitals are looking for additional revenue and the possibility of finding it in the thin margins of elder care may become more attractive.The question many elder care providers are wondering is, how will hospital consolidation affect their business model?
A few possibilities:
Changing Referral Patterns: Presumably a next step for these super-sized networks will be to accelerate their pursuit of physician practices. Elder care providers may be left in the cold, if new referral patterns for post-acute rehabilitation or home health services are established which favor the hospital network rather than independent providers.
Hospitals Expanding into the SNF arena: I doubt that hospitals have much interest in owning/operating SNFs (been there, done that), but increasingly hospitals are incentivized to seek effective and efficient post-acute care for their discharged patients. Those SNFs which achieve excellent outcomes for medically-complex patients may find themselves in a good position to gain referrals. Of course, the critical question relating to reimbursement for these high-cost patients remains unanswered. If the hospitals pursue the creation of ACO's, some fear they may be parsimonious when reimbursing their SNF partners in care.
Culture Change: In an attempt to differentiate themselves, efforts at implementing culture change in area SNF's may accelerate. Ironically, this movement to de-institutionalize SNF operations and transform them to become more resident-focused environments comes at the same time when SNF's must care for increasingly medically intensive residents.
As Dean Acheson once said, "always remember that the future comes one day at a time." Let's wait and see how incremental change may reveal larger trends over the course of the coming year.
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