Healthcare’s Consolidation Landscape

Christopher Cheney, June 1, 2017

The financial impact of the partnership with Frankfort Hospital is limited for IU Health, but it is an excellent fit with the health system’s hub-and-spoke organizational structure.

"Frankfort was a supplement to the regional hub hospital in the Lafayette region. It will help us draw more volume to the Lafayette region and expand what we are doing in the Frankfort community. But from a financial standpoint, this is a very modest part of our organization. It is about $50 million in revenue compared to our total operating revenue of about $6.2 billion. We like the coordination of the care and the strengthening of that region. As we continue to get into the population health space—we have commercial insurers, Medicare, and Medicaid in our payer mix—we are managing members of multiple health plans and are finding it very helpful to have strong partnerships in communities such as Frankfort."

In 2016, Medicare and other government programs accounted for 40% of gross patient service revenue at IU Health, Medicaid and HIP (Healthy Indiana Plan) for 21%, and commercial/managed care for 36%, with self-pay and other at 3%.

DuPage Medical Group offers physicians an alternative to hospital consolidation

Downers Grove, Illinois–based DuPage Medical Group, a physician organization in the Chicagoland market, is offering doctors and physician practices an alternative to MAP deals with health systems and hospitals. 

"Where we have had success driving some of our growth is that we are a physician-driven organization," says Michael Kasper, MHA, CEO of DuPage, which features more than 600 primary care and specialty doctors in more than 80 locations. For the 2016 fiscal year, DuPage reported net patient revenue at $741 million.

"I report to a board of doctors; and a lot of physicians, whether they are newly graduated or in the market, are faced with the challenges of information technology or surviving through the changes of Medicare reimbursement. We have the wherewithal of a sophisticated health system, but we try to protect the clinical environment and the entrepreneurial spirit of physicians. So we end up being very competitive in offering an alternative to physicians."

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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