Although they face significant obstacles, physician hospital investors will likely succeed in the end because they have a history of doing so, a crowd of these investors was told at the Physician Hospitals of America annual conference in Austin, Texas. The opening keynote speaker, futurist Jim Carroll, first voiced the message, which was later echoed by healthcare consultant Kevin McDonough.
Carroll's general theme was nothing new, and it reminded me of Alvin Toffler's book Future Shock, which I was assigned to read in my high school sociology class more than 30 years ago. But the more he tailored his message, the more Carroll's words resonated.
"There is so much opportunity in front of you, it's staggering," Carroll said, adding that—even though the Patient Protection and Affordable Care Act restricted business opportunities for physician-owned hospitals—growth was still possible with a change in mindset and a change in business models.
McDonough, a senior manager with Dallas-based consultants VMG Health, and VMG Health manager Sarina Hickey offered some specifics. "Margins have remained remarkably stable" for physician-owned hospitals, Hickey said. She added that doctor owners have been "adept at controlling costs," and, while legal and market challenges are daunting, "survivors will emerge stronger." McDonough noted that the ACA's limits on growth may increase the value of existing physician-owned hospitals because they have been made a "limited commodity."
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