Healthcare Business News

Texas Health Resources, Methodist team with Centerre for rehab hospital

By Beth Kutscher
Posted: January 17, 2014 - 4:00 pm ET

Two Dallas-area systems, Texas Health Resources and Methodist Health System, are partnering on a project to build a free-standing inpatient rehabilitation hospital in the suburb of Arlington.

The facility, which will break ground this summer, will be built as part of a joint venture with private equity-backed Centerre Healthcare, Franklin, Tenn.

Arlington-based Texas Health and Dallas-based Methodist, which don't compete with each other but have facilities in neighboring cities, started collaborating three years ago on ways to build their post-acute care capabilities, according to a Texas Health spokesman. They formed a home health joint venture in 2012 with another for-profit company, LHC Group, Lafayette, La.

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Revenue from joint venture projects is booked based on each system's ownership stake in the initiative. Financial terms of the collaboration with Centerre were not available.

The joint venture also comes as systems increasingly form nontraditional alliances that expand their reach without merging assets.

Both systems are part of Premier's ACO Readiness Collaborative, a spokeswoman for Methodist said. “It really gave us a more formal framework to look at continuity of care,” she said. “As our environment changes, acute care is not the most pressing need in a lot of cases.”

Texas Health and Methodist also have their own separate partnerships with Centerre, whose business model is partnering with systems to build and operate inpatient rehabilitation facilities. Methodist formed its first agreement to construct a rehab hospital with Centerre in 2006, while Texas Health partnered with the company in 2009.

Centerre says its model allows systems to increase their revenue streams, not only from rehab care but through related services, such as laboratory and imaging, without having to invest capital upfront. In addition, patients seen at the rehab hospital often remain within the system, using its outpatient and other post-acute care services after being discharged.

The new facility, Texas Rehabilitation Hospital of Arlington, will have 40 beds and treat patients who are recovering from conditions such as strokes; amputations; and spinal cord, brain and orthopedic injuries. It will be located between Texas Health Arlington (Texas) Memorial Hospital and Methodist Mansfield (Texas) Medical Center, and will employ about 150 people, a news release said.

Follow Beth Kutscher on Twitter: @MHbkutscher

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