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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Though they're at the low end of the physician pay scale, pediatricians are often found in leading activist or management roles in the healthcare system.
I was reminded of this when, at an event in Washington this week highlighting the Healthier Hospitals Initiative, Dr. Jeffrey Thompson, Gundersen Lutheran Health System's CEO, told an anecdote about how his organization was saving $1 million annually in energy costs after a $2 million investment in 2008. He then punctuated his remarks by noting how that math was easy to understand "even for us pediatricians."
I didn't know Dr. Thompson's specialty before, but I wasn't surprised to learn that the leader of an innovative, high-performing organization was a pediatrician.
After all, former CMS Administrator Dr. Donald Berwick and patient-safety pioneer Lucian Leape have pediatric backgrounds.
So does Dr. William Jessee, currently senior vice president and senior adviser with Integrated Healthcare Strategies and the former president and CEO of the Medical Group Management Association. Jessee has appeared on Modern Healthcare/Modern Physician's 50 Most Influential Physician Executives list six times.
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