5 Core Concepts for Healthcare Providers This YearWritten by Scott Becker, JD, CPA | January 20, 2012
Here are five core concepts for healthcare providers this year, as well as observations on key healthcare delivery trends during 2011.
1. Substantial shifting of healthcare providers. 2011 was an absolutely fascinating year in terms of pieces moving around the healthcare map. We saw an uptick in the amount of acquisitions by hospitals of hospitals and practices. Irving Levin and Associates reported that the top 10 hospitals mergers were valued at $5.6 billion in 2011, up from $3.8 billion in 2010. A recent Price Waterhouse Health Research Institute survey reported 46 percent of physicians are interested in hospital employment. This type of interest is consistent with the number of practice transactions we are seeing.
2. Assessing acquisitions, independence. We expect that in 2012 parties will be spending a good deal of time digesting the acquisitions they made last year and making sure that they have met their expectations. We expect independent hospitals and independent practices to take a deep breath and really assess their situation before aggressively moving forward to give up their independence.
3. ASC transactions, out-of-network, going public and more. The surgery center industry also saw a number of transactions involving national companies and hospitals buying surgery centers. We also saw (1) big chains pursue wholly the model whereby they partner with hospitals to acquire centers, (2) a return of big chains buying centers without hospital partners and (3) a couple large chains showing continued interest in acquiring physician-owned hospitals. In this sector, we also continue to see more and more aggressive action by payors as to out-of-network patients and increased effort to scramble for independent physicians to fill slots in surgery centers. We expect a few large ASC chains to test the public markets in 2012.
4. Increased governmental investigations. In 2011, we also witnessed significant increases in governmental investigation on a whole variety of fronts, including physician hospital relationships, false claims and billing and coding claims. With more integration of both providers and of payors, we expect more antitrust claims as well. Further, with more healthcare fraud investigators on the street, there will most likely be increases in anti-kickback and Stark Act investigations. RACs will also have an increasing material impact on hospital net income.
5. 2012 Developments. We expect 2012 to be a very interesting year. There will be (1) a Supreme Court decision on the Patient Protection and Affordable Care Act's constitutionality, (2) a presidential election and (3) a great deal of overall uncertainty in the markets as to the direction of the country, and as to the direction of the healthcare sector.
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