The shift of hospital services to outpatient settings continued last year, marked by an increase in the total number of ambulatory-care facilities owned and operated by hospitals and independent chains.
The number of ambulatory-care facilities operated by healthcare systems and independent providers rose nearly 32% in 1993 to 5,492, compared with 4,168 in 1992, according to MODERN HEALTHCARE's Multi-unit Providers Survey. Services provided at these facilities include cancer treatment, diagnostic imaging, physical therapy, pain management, wellness and women's health.
The number of independently owned ambulatory-care facilities rose 57% to 1,907, while the number of facilities owned and operated by hospitals climbed 21% to 3,585.
The number of ambulatory-care facilities on hospital campuses increased 7% to 1,055 in 1993, while the number of off-campus ambulatory-care centers climbed 28% to 2,530.
The scope of ambulatory-care development will grow as hospital systems continue to develop affiliations with one another as well as independent providers, said Ted Matson, president of the Chicago-based Ambulatory Care Advisory Group. Services such as urgent care-which at one time were considered obsolete for ambulatory-care centers-now are being given careful consideration as providers continue to find new, less expensive ways to deliver healthcare services.
"The core of ambulatory-care development will continue to be hospital-based as more hospital services will be moved to satellite facilities," Mr. Matson said. "There is a heightened level of awareness on the part of hospital systems to continue to develop these services."
The U.S. Department of Veterans Affairs ranked first in the survey of ambulatory care in 1993, operating 352 total facilities, an increase of 104% from 1992. Kaiser Permanente and HealthSouth Rehabilitation Corp. ranked second and third, with 259 and 221 freestanding outpatient facilities, respectively. The VA and Kaiser operate all of their outpatient services on their hospital campuses.
Diagnostic imaging.Last year was hardly a banner year for diagnostic imaging providers. In fact, nearly every major independent operator of diagnostic imaging services reported substantial losses in operating income for 1993, according to the survey.
Alliance Imaging, while increasing the number of imaging centers it operates to 14 from 6 in 1992, reported a 33% drop in net operating income to $8.5 million last year. The company reported a net loss of $14.6 million, or $2.07 per share, compared with net income of $1 million, or 15 cents per share, in 1992.
Richard Zehner, chairman, president and chief executive officer of the company, attributed the results to changes in the reimbursement market. "Although these factors are adversely affecting our current financial results, we believe that market conditions are stabilizing," he said.
Dallas-based Maxum Health Corp., which declined to report net patient revenues and operating income in the survey, also had a rough fiscal 1993. Maxum reported a net loss of $6.8 million, or $2.33 per share, in 1993, compared with a net loss of $8.3 million, or $2.93 per share, in 1992.
The company, which operated 77 mobile imaging units in 1993, is also in the process of a major restructuring. The company recently announced the promotion of Glen Cato, its senior vice president and chief financial officer, to president and CEO. Mr. Cato, who joined Maxum in November 1989, replaced executives from the contract-management firm Alpha Directions, Santa Ana, Calif. Alpha Directions was brought in to turn around Maxum last June after Maxum president William MacKnight and Senior Vice President and Chief Operating Officer Nancy Corday resigned from the company (June 7, 1993, p. 16).
"A new vision and direction for Maxum is being established, which among other things will emphasize management services and managed care," Mr. Cato said. "Although there has been considerable progress, these changes should not be interpreted to mean that our restructuring activities have been completed."
Dialysis. The total number of dialysis facilities operated by independent chains and hospital systems rose 21% to 808 in 1993, according to the survey. Facilities owned by independent chains rose 21% to 672, while dialysis facilities operated by hospital systems increased 19% to 136.
Clearly, independent chains such as W.R. Grace & Co. subsidiary National Medical Care, San Francisco-based Vivra and Nashville, Tenn.-based REN Corp. remain the independent powerhouses of the outpatient dialysis communities.
However, that's not to say that these companies didn't experience their share of troubles in 1993.
For example, W.R. Grace found itself in the midst of controversy last June when the Food and Drug Administration banned the U.S. importation of kidney dialysis equipment manufactured at Grace manufacturing plants in Mexico and Ireland (Aug. 16, 1993, p. 22).
The controversy centered on an FDA decision to ban the importation of dialysis bloodlines and dialysis machines made at its international manufacturing plants.
The FDA cited National Medical Care with violating the Federal Medical Device Good Manufacturing Practice Regulations and subsequently blocked the import of NMC's products in the United States.
The company eventually received approval to release some 350,000 dialysis bloodlines for use in its kidney dialysis clinics.
Other ambulatory care.The number of outpatient occupational health facilities operated by hospitals and independent chains rose 34% in 1993 to 651. Facilities operated by independent chains soared 85% to 150 last year, while system-owned centers increased 24% to 501.
The total number of physical therapy/sports medicine facilities operated by hospitals and independent chains skyrocketed 109% to 1,371 in 1993.