Healthcare Business News

For-profits rising

Not-for-profits still dominate, but rivals advance

By Ashok Selvam
Posted: December 15, 2012 - 12:01 am ET

The dominance of not-for-profit hospitals and healthcare systems remains, but in recent years their for-profit counterparts have been gaining ground.

It's been a decade since the number of not-for-profit hospitals stood at more than 3,000. The latest data from the American Hospital Association counts 2,904 not-for-profit hospitals in America in 2010. Except for a 10-hospital increase in 2008, the number of not-for-profits has decreased every year since 2002. Since 2006, the number of not-for-profit hospitals has shrunk by 15, a decrease of less than 1%. Meanwhile, for-profit hospitals have grown at a faster pace over the same period, increasing nearly 14% from 890 in 2006 to 1,013 in 2010. According to AHA data, 2010 marked the first year for-profits crossed the 1,000-hospital threshold.

According to the same data, it appears growth in the for-profit sector has come primarily at the expense of local, governmentally owned hospitals. Those facilities dropped from 1,119 in 2006 to 1,068 in 2010, a nearly 5% decrease.

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Although developments involving the Patient Protection and Accountable Care Act and its role in presidential politics weighed heavily on hospitals and healthcare systems during the past year, the sector's continuous quest to reduce costs and integrate care also provided an important storyline, says Thomas Dolan, president and CEO of the American College of Healthcare Executives.

“It's integrating more physicians into our organization and preparing for accountable care organizations, medical homes and things of that nature,” Dolan says.

The ongoing shift toward outpatient care offers an example. Outpatient visits increased by 4.3%, rising from 690.4 million in 2006 to 720.4 million in 2010, according to the AHA. During the same five-year period, inpatient days decreased by 3.9%, from 238.2 million in 2006 to 228.8 million in 2010.

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