P.O. Box 409095
Chicago, IL 60640
Length: 5 minutes, 27 seconds
Interviewer: Jessica Zigmond, Modern Healthcare
Interviewee: Spencer Sockwell, senior vice president and manager of healthcare banking at the Bank of Texas in Dallas.
[00:00:04.22] Womans Voice: Welcome to this edition of Special Report Extra, brought to you by Modern Healthcare, and powered by Martopia. With each edition of Special Report Extra, listeners hear directly from key healthcare executives involved in the major events shaping the industry.
[00:00:28.21] Jessica Zigmond: This is Jessica Zigmond, and Im a reporter for Modern Healthcare and Modern Physician. Today were talking with Spencer Sockwell, who is a senior vice president and manager of healthcare banking at the Bank of Texas in Dallas. The topic today is access to capital for physician-owned hospitals, which is featured in a story in the Sept. 10 issue of Modern Healthcare. Thank you, Spencer, for being with us. And Ill ask the first question. Would you please explain briefly your involvement in the access to capital process for physician-owned hospitals?
[00:00:59.09] Spencer Sockwell: Thank you, Jessica. The commercial banks roles in the access to capital, much like that for Bank of Texas, is to evaluate the opportunity, look at the operators, and is to determine if the marketplace needs that type of project. Our role is to work not only with the physician owners, and also with the operators, to bring our capital to the table in terms of borrowed funds. And its not unique to the commercial banking world as well. Theres commercial finance companies and other external providers that do provide the capital, not only to the entities owning the real estate, the bricks and mortar of the hospital or healthcare enterprise, but also to the operations of the hospital or healthcare enterprise itself.
[00:01:40.12] Jessica Zigmond: The next is a two-part question. First, opponents of the physician-ownership model argue there is a conflict of interest with physicians referring patients to facilities where they have a financial stake. Do you work on projects with physicians who have ownership in multiple facilities?
[00:01:56.15] Spencer Sockwell: Jessica, we will look at the project itself, oftentimes there are physicians that have ownership positions in more than one healthcare facility. Ill refer to them as hospitals right now. But in those instances, we will look at who the operator is or who the manager of the healthcare facility is, and if those physicians are tied closely with that operator, for example if its an existing hospital operator or if it is a physician-owned manager. Thats how we determine whether it makes sense to evaluate the ability of one physician to have an ownership stake in more than one hospital.
[00:02:33.17] Jessica Zigmond: The second part of that question is, what check-and-balance system is in place to ensure that, as advocates of physician-owned hospitals have said, this model is about better patient care and not financial gain?
[00:02:46.08] Spencer Sockwell: Sure, absolutely. And there are many experts out there, Im not an expert in that arena, but there are many experts out there who have conducted studies. We all need to begin with the premise that the physicians will do the right things for their patients and provide that high level of care, regardless of the environment or situation or who owns the hospital. And thats where I begin my analysis. We will also look to ensure that the quality of care at the facility is of the highest quality, and thats why its so important for anybody providing capitalinternal, external or otherwise, whether through senior banks or equity contributionsto look at the experience and the expertise in the marketplace of that particular operator. And, again, the operator might be a physician-owned operator, it might be a not-for-profit health system, but how is it that these physicians are coalescing to bring that quality of care to that particular hospital, in that particular market?
[00:03:37.08] Jessica Zigmond: Thank you. And our last question. Pending legislation in Congress could threaten the future of physician ownership, specifically in prohibiting further expansion and limiting the ownership stake of physicians who have ownership in facilities prior to July 24, 2007. If signed into law, how would Bank of Texas adapt to these changes?
[00:03:55.08] Spencer Sockwell: We are following that very closely, Jessica; it is interesting to note that this is not the first, nor do I ever anticipate this being the last, attempt to either limit or govern physicians abilities to own healthcare enterprises. Not only would the (State Childrens Health Insurance Program) Act have the impact that you said, but it would also curtail any additional growth at existing facilities. And so thats a challenge.
The direct answer to your question is: We are looking to ensure, from an operators perspective, do they have the abilities to continue operating even without the physicians being owners? In other words, what would the role of the physicians be going forward at that particular hospital? Would they be employees? Would they be contracted? etc. And No. 2, from an equity perspective, if the physicians are no longer owning the hospitalsagain, whether thats the operation of the hospital or the real estate of the hospital, but well focus on the operationsbut if the physicians dont have ownership of the operations anymore, does the operator? Does the managing entity, have the wherewithal to assume 100% ownership role of the operations?
[00:04:52.09] Jessica Zigmond: This is Jessica Zigmond. Im a reporter with Modern Healthcare, and weve been talking with Spencer Sockwell, senior vice president and manager of Healthcare Banking at the Bank of Texas in Dallas. Thank you, Spencer, for your time today.
[00:05:05.13] Spencer Sockwell: Thank you, Jessica.
[00:05:07.04] Woman's Voice: Thank you for listening to this edition of Special Report Extra, brought to you by Modern Healthcare and powered by Martopia. Listen to other editions of Special Report Extra by visiting the multimedia section of Modern Healthcare Online at modernhealthcare.com.