Common Ownership between Hospitals and Post-Acute Providers Increasing: Implications for Home Health and Hospice Providers

Did you know that nearly half of hospitals, skilled nursing facilities and home care organizations have common owners/investors? According to the Health Affairs paper “Corporate Investors Increased Common Ownership in Hospitals and the Postacute Care and Hospice Sectors” published in the September issue of Health Affairs, researchers from Harvard University found that the percentage of acute care hospitals having common ownership ties to the post-acute or hospice sectors increased from 24.6% in 2005 to 48.9% in 2015. (Post-acute includes nursing facilities and home health agencies).

At a national level, this raises questions about competition and antitrust regulations, as well as payment and regulatory policies.

At the local level, this compels sales and marketing teams to determine which prospects have the most potential and how much is likely to be “locked up” because of common ownership.

This common ownership can be a two-edged sword depending on how you are looking at it.

Captive Agencies

If you are a hospital-affiliated organization, you need to understand the following:

  1. How well are you fulfilling your mission in terms of continuity of care?
  2. Are internal referral sources being loyal?
  3. Are preferred post-acute providers giving back in proportion to what they receive?

Freestanding Agencies

If you are a freestanding provider, you risk getting closed out of the post-acute networks in your market and/or the hospital-specific, shortened referral list.

  1. Is there enough volume to survive if your organization is closed out of the post-acute networks? 
  2. Can you develop a niche which goes around the limited preferred provider lists, such as dual eligible?

The Future

This research confirms what many providers are experiencing in their market, as well as the anecdotes we are hearing…Referral opportunities are getting more and more limited. You need to assess your position and develop a strategy.  If not, you will be left on the sidelines.