That aligns with the company’s mission to be community- and patient-focused, emphasizing preventive care, behavioral health and high-quality emergency treatment, he said. Shetty said putting physicians in charge allows physician-owned hospitals to put long-term investments over short-term returns. There wasn’t any evidence that existing hospitals stopped accepting Medicare, according to the study. Nine physician-owned hospitals opened in Texas between 20, and none accepted Medicare. Several hospitals rushed to open under the physician-owned model before ACA was implemented, the study found. A 2016 study by the journal Health Affairs examined 106 Texas hospitals to determine whether hospitals modified operations to increase profitability with the new ACA restrictions. When the Affordable Care Act was passed in 2010, the federal government put a moratorium on opening physician-owned hospitals. “Physicians who had economic interest started directing their patients that were paying to their hospitals, and those that weren’t paying to the charitable nonprofit hospitals,” Berrett said. Berrett said there’s no evidence to show that doctors recommend high-cost treatments, but physician-owned hospitals had high ratios in the 1980s and 1990s of paying patients. Physician-owned hospitals can direct patients who can’t afford to pay for care to other hospitals or could upcharge paying patients to offset any so-called charity care costs it absorbs. “It wasn’t until the economics became very, very attractive that physicians returned to looking at physician-owned hospitals,” Berrett said. Eventually, people began to flock to those institutions over smaller, less technologically advanced physician-owned hospitals. Before, hospitals were almost always run by religious organizations. Its physician-owned business model is controversial in the health care industry.īritt Berrett, a professor and director of the Center for Healthcare Leadership and Management at the University of Texas at Dallas, said that controversy actually goes back to the origin of hospitals before and after the industrial revolution. The company reported $5.4 billion in revenue in 2020. Steward now runs 34 hospitals in nine states, five in Malta and Colombia, and a large network of doctors’ offices. Ralph de la Torre, who is Steward’s chairman and CEO. Earlier this year, Cerberus cashed out its stake in the company for a reported $800 million profit.Ĭerberus set up its exit a year ago by transferring ownership of Steward to a group of the company’s own doctors led by Dr. Steward was created by New York private equity firm Cerberus Capital Management in 2010 when the investment company bought Caritas Christi Health Care, the second-largest hospital group in Massachusetts at the time. Related: A $1.1 billion deal made in Dallas-Fort Worth: Tenet, Steward swap ownership of hospitals
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