Acquisitions

News stories of hospital systems buying physician practices are abundant these days. In our upcoming digital issue of The Journal of Healthcare Contracting, we take a look at the trend, and how it differs from the buying frenzy of the 90s that eventually led to health systems selling off the practices they had purchased.

Why will this time be different? Consider the following —
In 2003, 8 percent of the medical groups belonging to the Medical Group Management Association were hospital-owned. In 2008, 10 percent were. While the vast majority of practices (81 percent) were still physician-owned, the jump from 8 percent to 10 percent was, in fact, a 25 percent increase, points out Dave Gans, MSHA, FACMPE, vice president of innovation and research, Medical Group Management Association. “What we’re observing is a major shift in the relationship between doctors and hospitals,” he says. “Physicians are looking at the option of being part of a hospital-based integrated delivery system. So what we have is a realignment of how healthcare is being delivered.”

“There is rarely a hospital we talk to that doesn’t already have or is in the process of acquiring a physician practice,” says Deborah Holzmark, RN, senior manager, Dixon Hughes, a CPA and consulting firm headquartered in High Point, N.C. She estimates that 65 to 70 percent of the firm’s workload these days consists of consulting with hospitals and their owned physician practices.

Look for more in the upcoming July digital issue of The Journal of Healthcare Contracting