Health Care Organizational and Market Structures
Scenario:
You are the chief financial officer (CFO) of a hospital located in a highly competitive, urban market split with two competing hospitals. The hospital is considering purchasing or affiliating with a large physicians’ practice. Your hospital has 30% market share but does not currently have any owned/employed physicians. Private insurers and Medicare are aggressively pushing value-based reimbursement under ACO contracts, and the one competing hospital has already acquired a large physicians’ practice.
Compare advantages and disadvantages of the vertical integration of the hospital and physicians’ practice, including economic factors that should be considered. Then, recommend strategies for the organizational integration of the hospital and practice. Defend or argue your recommendations using economic principles.
References
Getzen, T. (2015). Health economics for the healthcare administrator (Laureate custom edition). New York: Wiley.Chapter 8, “Hospitals” (pp. 172–186)Chapter 12, “Financing and Ownership of Health Care Providers” (pp. 259–287)
Getzen, T. (2015). Health economics for the healthcare administrator (Laureate custom edition). New York: Wiley.
Pink, G. H. & Song, P. H. (2020). Gapinski’s understanding healthcare financial management (8th ed.). Health Administration Press.Chapter 7, “Equity Financing”
Pink, G. H. & Song, P. H. (2020). Gapinski’s understanding healthcare financial management (8th ed.). Health Administration Press.
Colla, C. H., Lewis, V. A., Shortell, S. M., & Fisher, E. S XXXXXXXXXXFirst national survey of ACOs finds that physicians are playing strong leadership and ownership roles. Health Affairs, 33(6), XXXXXXXXXX.
Cutler, D., & Scott Morton, F XXXXXXXXXXHospitals, market share, and consolidation. Journal of the American Medical Association, 310(18), 1964–1970.
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