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Hardin Memorial Hospital recently announced that it has reached an agreement to acquire Surgical Specialists PSC, a physician-owned private practice of five general surgeons, three urologists and support staff located in Elizabethtown. Hospital trustees approved the $3.5 million purchase during a late October board meeting. HMH President and CEO David Gray said that although the acquisition is an unbudgeted agreement, the hospital would be making the purchase with available cash on hand.
Gray and Hardin County Judge-Executive Harry Berry noted the purchase price to be fair and that the practice has a strong trend of quality care.
Acquisitions such as this are not at all uncommon in the healthcare industry. Cuts to physician reimbursement fee schedules through Medicare and private insurance provider plans that took effect earlier this year have eaten into the profits of physicians in private practice, making employment a more attractive option. And, as the specifics of health care reform continue to materialize and usher in change for hospitals, acquisition of such practices can help hospitals meet mandated requirements that are coming, better control the quality of care their customers receive, and secure access to the physicians from whom they receive it. With the continuation of changes in the health care market, an increase in such agreements can be anticipated.
Unfortunately, though, such acquisition strategies aren’t without risk. Hospitals often find it hard to manage and integrate into overall operations the private practices they’ve bought. At the same time, physicians and surgical specialists within these acquired practices equally find it difficult to integrate as “employees” from the flexibility and independence previously enjoyed in their private practices.
These hurdles and others will be challenges Hardin Memorial Hospital administrators and the physicians of Surgical Specialists must work together to address.
Now that an acquisition and purchase price agreement has been reached, working out and formalizing clear, manageable and measureable operating goals, compensation structures and quality will help to ensure that this acquisition adds value, both for the hospital’s bottom line and equally for the physicians involved. If either side of this equation is out of balance, the potential for a favorable outcome from this acquisition will be at risk and the ultimate losers will be the patients and taxpayers both endeavor to serve.
This editorial represents a consensus of The News-Enterprise editorial board.