Outpatient services will continue to play a critical role in 1994 as healthcare reform forces providers to find creative, less expensive ways to deliver care.
Hospitals will rely more heavily on ambulatory care as a means to deliver primary care, preventive care and wellness services. Expect to see more hospitals, specifically inner-city institutions, develop outpatient primary-care facilities to treat the growing number of patients without adequate healthcare insurance.
In an attempt to attract new business and additional revenues, hospitals also will market outpatient care as an ideal setting for employee occupational health, wellness, fitness and children's healthcare programs.
Hospitals will look to add home infusion and home-care staffing to the list of comprehensive outpatient services. Nearly 34% of U.S. hospitals offered some type of home-care services in 1992, according to the latest data from the American Hospital Association.
At one time hospitals perceived home care more as a tax write-off than a legitimate ambulatory-care service. Today, hospitals are expanding into home care through joint ventures with contract management companies and affiliations with independent providers.
Independent home infusion providers, medical equipment companies and home-care staffing agencies will merge or form new affiliations in an effort to position themselves for contracts with hospitals and healthcare systems.
In December three publicly owned home infusion providers-Curaflex Health Services, HealthInfusion and Medisys-announced plans to merge in a stock-for-stock transaction valued at roughly $217 million.
Hospitals also are looking to form joint ventures with outpatient surgery providers to capture the outpatient surgery market. And to no one's surprise, Louisville, Ky.-based Columbia Healthcare Corp. appears to be leading the way, forming regional affiliations with the nation's two largest independent surgery chains-Dallas-based Medical Care America and Nashville, Tenn.-based Surgical Care Affiliates.
The chess game between Medical Care America and SCA to consolidate will continue following SCA's unsuccessful attempt to purchase the nation's largest outpatient surgery provider in a deal valued at nearly $950 million.
But these two giants aren't reflective of the overall outpatient-surgery market, which remains highly fragmented. There are more than 1,700 freestanding surgery centers nationwide, 86% of which are physician-owned or independently owned, and 14% of which are hospital-owned or hospital-operated, according to statistics compiled by Chicago-based SMG Marketing.
Some of the affiliation activity undoubtedly will attract the watchful eyes of the federal government, which will look to see whether the business arrangements between hospitals and for-profit home infusion chains and outpatient surgery centers violate physician anti-kickback laws involving Medicare and Medicaid patients: See Caremark and T2 Medical.
As hospitals move toward a primary-care model, the future for many outpatient diagnostic imaging providers appears bleak. Publicly owned imaging companies are scrambling to renegotiate contracts with hospitals, expand into uncharted rural markets and test opportunities in Canada and Mexico.
Alliance Imaging, Medical Imaging Centers of America and Maxum Health Corp. lost millions during fiscal 1993. All are in the process of internal restructurings.
"Long-term survivors in (home infusion) will need to increase market share while decreasing costs and maintaining a quality patient-care program. Consolidations and mergers are one way infusion companies can combine overlapping operations while reducing costs and increasing patient volume in select market areas."
chairman, president and chief executive officer,
Curaflex Health Services,
"The growth of outpatient surgery will be driven by increases in laparoscopic procedures, significant improvements in anesthesia and pain management. The trend toward consolidation will continue as more centers are purchased by national companies or local hospitals. The days of entrepreneur physicians launching outpatient surgery centers seems to be coming to an end. Industry experts expect that 85% of all surgeries will be outpatient by the year 2000."
chief executive officer,
Fresno (Calif.) Surgery Center
"Hospitals are the early winners in ambulatory-care expansion and integration (because) they are positioned to recapture enormous market shares which have previously been lost to alternative providers-namely freestanding diagnostic and treatment centers. Freestanding providers are beginning to see an erosion of their patient base and reimbursement due to increased managed-care penetration."
Ambulatory Care Advisory Group,