Since 2006, it has been abundantly clear that opponents of physician hospitals are interested in one thing and one thing only—maintaining absolute control of hospitals. Legislation has plainly reflected that fact, including any hospital that is physician-owned in all-encompassing negative legislation present in more than 12 bills since 2007. Back in 2006 the American Surgical Hospital Association, or ASHA, board of directors recognized this fact, and in 2007, ASHA became Physician Hospitals of America, or PHA.
Since ASHA's—PHA's—origination in 2001, the association's goal has been to represent the rights of physicians to own and to govern hospitals. As the physician hospital industry has changed, the association changed with it, and we continue to do so even now.
PHA's growth, from just over 60 hospital and corporate members in November 2005 to well over 250 hospital and corporate members in 2009, is reflective of the growing strength of our industry. PHA represents the most entrepreneurial and forward-thinking physicians in the country. With such talent backing this industry, I can say with confidence that no matter the opposition, physicians will continue to find appropriate means by which to stay involved in hospital ownership, governance and direct patient care.
In the remainder of this article, I wanted to provide you some general data about physician hospitals that I believe you'll find enlightening. At this time, there are approximately 235 physician-owned hospitals in existence. The breakdown of these hospitals by specialty is as follows: 134 multispecialty surgical hospitals; 43 general acute-care hospitals; 20 heart hospitals; 10 orthopedic hospitals; nine long-term, acute-care, or LTAC, hospitals; nine rehabilitation hospitals; three psychiatric hospitals; two women's hospitals; and one children's hospital.
In addition, we are currently aware of 123 hospitals under development. These include 69 multispecialty surgical hospitals; 18 rehabilitation hospitals; 17 general acute-care hospitals; 13 orthopedic hospitals; three heart hospitals; two psychiatric hospitals; and one women's hospital.
Even in the face of political duress, physicians recognize the need to directly affect patient care. The continued growth of physician hospitals is impressive … and patients and communities are the biggest beneficiaries of this growth!
In 2010, 40 hospitals plan to open, 21 hospitals plan to open in 2011, 23 hospitals are scheduled to open in 2012, and 12 more hospitals are already in line to open in 2013. These numbers are encouraging and provide evidence of the extraordinary opportunities that exist in so many communities across the country to make certain that quality patient care, efficiency and patient choice are still valued.
Here are a few additional items of interest regarding physician hospitals. For each type of physician-owned hospital currently in existence, the average staffed bed size is as follows: general acute-care hospitals, 233 beds; heart hospitals, 65 beds; multispecialty surgical hospitals, 40 beds; rehabilitation hospitals, 34 beds; LTAC hospitals, 30 beds; and orthopedic hospitals, 24 beds.
The average number of employees at each of these hospitals is: general acute-care hospital, 519 employees; heart hospital, 315 employees; multispecialty surgical hospitals, 152 employees; rehabilitation hospital, 201 employees; LTAC hospital, 175 employees; and orthopedic hospital, 187 employees.
Currently, physician-owned hospitals are located in 35 states. By order of highest hospital density, these include: Texas, 68; Louisiana, 29; California, 16; Indiana, 14; Oklahoma, 14; Kansas, 12; Arizona, 8; Ohio, 8; South Dakota and Tennessee, 7; Arkansas, 5; Nebraska, Pennsylvania and Utah, 4; Alabama, Idaho, Michigan, New Mexico and Wisconsin, 3; Colorado, Georgia, Hawaii and Montana, 2; and Florida, Illinois, Kentucky, Missouri, North Carolina, North Dakota, Nevada, Oregon, South Carolina, Washington, West Virginia and Wyoming, 1.
On aggregate, physicians' ownership interest in each of these hospitals ranges from 5% to 100%. However, of the approximately 230 existing hospitals, only 30 are 100% physician-owned. In other words, at this time 87% of existing hospitals are in a joint venture with one or more partners. Of the 87% of hospitals that are jointly owned, 70 hospitals, or 35%, are partnered with other not-for-profit or for-profit hospitals.
In examining the hospital joint ventures, it is interesting to note that there are approximately 27 development corporations involved in these projects, and an estimated 48 not-for-profit and for-profit hospital systems partnered with physicians in these jointly owned hospitals.
The figures above include only those hospitals that are currently in existence. An overview of the hospitals that are under development right now solidifies the trend toward the joint venture model. Another emerging trend evident when reviewing those hospitals that are opening in 2009 and beyond is the trend toward larger, more comprehensive hospital models—more general acute-care facilities and fewer small, multispecialty hospitals. A number of positive conclusions can be drawn from these two evident trends. I'll let you draw your own.
One final trend calls for further examination—that of physicians taking on the burden of providing continued access to hospital care in communities that would otherwise be without. More and more often, especially in the current economic times, physicians are being called on to rescue local hospitals from bankruptcy, or from a hospital system that has run the local hospital into the ground and is letting it go. At this time, there are more than 35 physician hospitals that have been “rescued” by doctors. In addition, there are approximately 15 hospitals currently under development being rescued by physicians. This is a compelling fact, to say the least.
As this data clearly demonstrates, physician hospitals have a promising future as providers of high-quality, high-efficiency healthcare long into the future.
Molly SandvigExecutive directorPhysician Hospitals of AmericaSioux Falls, S.D.
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