Healthcare’s Consolidation Landscape

Christopher Cheney, June 1, 2017

Louge says a prime example of OhioHealth’s approach to acquiring a community hospital is 64-bed O’Bleness Hospital in Athens, Ohio, which became an OhioHealth managed affiliate in May 2010 and a full member of the health system in a noncash transaction in January 2014.

"We had an affiliation for supply chain and other low-hanging fruit. As the market got tougher, and reimbursement was a challenge, and O’Bleness struggled with lack of depth and breadth of resources, we entered into an agreement where we assumed management of the facility. We helped them recruit and retain physicians."

Membership had several advantages for O’Bleness. "Most of that revolved around: recruiting and retaining physicians in their community; doing outreach from Athens to the surrounding rural areas to help ensure those patients would come to Athens for care; guaranteeing that certain kinds of specialty care would be delivered in Athens—an example of that is radiation oncology; negotiating their managed care contracts, which was something that we could not do before the acquisition; and offering the depth and breadth of the resources we have in central Ohio."

The acquisition deal reached in 2013 also generated benefits for OhioHealth, Louge says.

"For one, we have a stable medical community in Athens, where we have always had a presence. We are working to make healthcare better there by keeping care local to the extent that is reasonable and logical. And there are now trusting relationships between the physicians in Columbus and Athens that bring patients to us here in Columbus, while at the same time sending patients back to Athens once advanced care has been delivered. It is a win-win for the community of Athens; it is a win-win for the physicians in Athens; and it is a win-win for OhioHealth both in Athens and Columbus."

The financial impact has been positive for both parties, he says.

"Today, O’Bleness is making a healthy, stable profit. When you see that kind of performance, what you see in that community is that healthcare is starting to thrive. They are keeping patients in Athens. They are seeing more volume. We have also seen the level of quality rise, … which also helps keep care local and helps the financial picture. And Athens County is one of the top counties in terms of referrals into OhioHealth outside of the Columbus metro area."

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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