An emerging company is promoting a new not-for-profit model of long-term acute-care hospitals within hospitals, offering competition for investor-owned facilities that currently dominate the market.
"If you're a not-for-profit hospital and looking at doing this model of inviting a for-profit company, you're asking yourself if they're going to live up to the standard of care in the community," said Michael Soisson, a consultant with Gill/Balsano Consulting. "That's a big issue for boards and particularly for not-for-profit boards that are skeptical of for-profits coming in and renting space."
Ed Cooper, president and chief executive officer of Acuityhealthcare Management Corp., a long-term acute-care hospital company, is among several operators pushing a model that allows the acute-care hospital to open its own not-for-profit long-term facility within its own space.
For interested providers, Cooper creates a separate, not-for-profit corporation owned by the host hospital with a five- to seven-member board that also includes minority representation from the host hospital. To obtain financing, the new corporation can approach banks for a loan structured as a line of credit or have the acute-care system co-sign on the loan, he said. "The not-for-profit model is more compatible with the mission of a not-for-profit hospital or health system," said Cooper, who launched Acuityhealthcare in May 2001. The company recently signed its fifth deal-to manage a 30-bed not-for-profit long-term acute-care hospital with Our Lady of Lourdes Health System in Camden, N.J. Acuityhealthcare also provides billing services for Sister Emmanuel Hospital, a 29-bed not-for-profit long-term acute-care hospital within Mercy Hospital in Miami.
"The not-for-profit status was consistent with our Catholic identity, as well as a focus on the needs of our local community," said Shed Boren, CEO of Sister Emmanuel. "We are mission-driven and not motivated by financial incentives and pressures."
Brad Traverse, executive director of the Acute Long Term Hospital Association, which represents more than 145 free-standing long-term acute-care hospitals and hospitals-within-hospitals nationwide, said there is evidence that more not-for-profit systems are developing their own long-term-care facilities. "Whether they can do that without violating the CMS separateness criteria is another thing," he said.