Uncategorized
Jan 18

Chicago hospital merger push driven by economics

This article was in a recent edition of the Chicago Tribune newspaper (http://www.chicagotribune.com/business/chi-thu_advocate1.17jan17,0,7364306.story).

The article says that a flurry of Chicago-area hospitals are discussing plans to merge or seek buyouts. The trend reflects a push by smaller hospitals to combine with larger providers to gain market share and clout with insurance companies who pay for the hospital’s services, help fund expansions or deal with the rising number of uninsured patients. It’s also easier to merge instead of going through regulatory and financial hurdles when building, analysts say.

My question to you is this – does this trend portend to physician practices also? Aren’t physician practices feeling the same pain and are seeking the same benefits of a merger. YOU BET THEY ARE! But for some reason physicians just can’t seem to get over the hurdle and decide a merger is in their best long term interests. I know they don’t want to lose their independence and such, but I still don’t see the economic viability of the small to medium practices when I look in to the future.

So why aren’t we seeing more physician mergers? I know the pain is there and I’m about to see it confirmation of it when I prepare the 2007 individual income tax returns of these physicians. Guess what I’m going to see – a continued decline in physician income.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →