Nov 14, 2019

Hospitals still want to cash in despite the rise of outpatient clinics

Photo: David Sacks/Getty Images

Hospital beds are not filling up like they used to, but that doesn't mean hospitals want their beds to be empty.

What they're saying: Even though more patients are being treated in outpatient clinics rather than hospitals, "we'll still be able to keep our beds pretty full," Don Scanlon, chief financial officer at Mount Sinai Health System, said this week at an investor lunch held at Goldman Sachs headquarters in New York City.

Details: Mount Sinai, a not-for-profit hospital system based in Manhattan with $5 billion in annual revenue, is preparing to sell $475 million in bonds, and was making its pitch to bondholders about why buying that debt would be a good deal.

Between the lines: Mount Sinai's discharges have trended down, but the hospital doesn't want to lose the bigger dollars tied to inpatient stays. And the system wants to reassure municipal investors they will see returns.

  • As a result, Mount Sinai has invested more money in outpatient centers in other parts of New York that serve as "feeders" for its main city hospitals, Scanlon said.

The bottom line: Mount Sinai, Trinity Health, Banner Health and a host of other hospital systems have openly touted plans to boost or retain admissions even though they say they want to keep people out of the hospital. This is a fundamental disconnect between "value-based care" and the system's financial incentives.

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Another reality check on hospital beds

Mount Sinai sponsored an NYC luncheon in 2015. Photo: Cindy Ord/Getty Images for Mount Sinai Health System

Hospital beds are not filling up like they used to, but that does not mean hospitals want their beds to be empty.

What they're saying: Even though more patients are being treated in outpatient clinics rather than hospitals, "we'll still be able to keep our beds pretty full," Don Scanlon, chief financial officer at Mount Sinai Health System, said this week at an investor lunch held at Goldman Sachs headquarters in New York City.

Go deeperArrowNov 14, 2019

Private equity eyes another rural hospital chain

Photo: Andrew Lichtenstein/Corbis via Getty Images

Private equity giant KKR has floated a private buyout of Quorum Health, a 24-hospital system that operates in rural and small suburban communities, for about $30 million, or $1 per share. Quorum executives said they would "carefully consider" any deal.

Where it stands: Private equity has increasingly bought up hospital chains, doctors' groups, and ground and air ambulance companies due in large part to those firms' inherent market power. KKR, for example, just took physician staffing firm Envision Healthcare private for $10 billion last year.

Go deeperArrowDec 4, 2019

Hospitals are going to war against Trump's price transparency push

Illustration: Lazaro Gamio/Axios

Hospitals sued the Trump administration yesterday over its requirement that they disclose their negotiated rates, the latest of the industry's moves to protect itself from policy changes that could hurt its revenues.

Why it matters: Hospitals account for the largest portion of U.S. health costs — which patients are finding increasingly unaffordable.

Go deeperArrowDec 5, 2019