Hospital Acquisitions Before Healthcare Reform. Issue 3 (May 2015)

• Record Type: Journal Article
• Authors: McCue, Michael J.; Thompson, Jon M.; Kim, Tae Hyun
• Is Part Of: Journal of healthcare management. Volume 60:Issue 3(2015)
• Publication Date: 2015-05
• Subjects: Hospitals -- Administration -- Periodicals; Health services administration -- Periodicals; Hospital Administration; Hospitals; Delivery of Health Care; Hospital Services Administration; Health services administration; Hospitals -- Administration; Electronic journals; Periodicals; Periodicals; 362.1068
• Languages: English
• ISSNs: 1096-9012

Abstract

Abstract : EXECUTIVE SUMMARY: The hospital industry has experienced increased consolidation in the past 20 years. Since 2010, in particular, there has been a large rise in the number of hospital acquisitions, and observers have suggested this is due in part to the expected impact of federal healthcare reform legislation. This article reports on a study undertaken to identify the market, management, and financial factors affecting acute care, community hospitals acquired between 2010 and 2012. We identified 77 such hospitals and compared them to other acute care facilities. To assess how different factors were associated with acquisitions, the study used multiple logistic regressions whereby market factors were included first, followed by management and financial factors. Study findings show that acquired hospitals were located in markets with lower rates of preferred provider organization (PPO) penetration compared with nonacquired hospitals. Occupancy rate was found to be inversely related to acquisition rate; however, case‐mix index was significantly and positively related to a hospital's being acquired. Financial factors negatively associated with a hospital's being acquired included age of plant and cash flow margin. In contrast to the findings from earlier studies of hospital acquisitions, our results showed that acquired hospitals possessed newer assets. However, similar to the findings of other studies, the cash flow margin of acquired hospitals was lower than that of nonacquired facilities.