Hospitals go for the gold in affluent areas

While hospitals have been moving into affluent areas for years, new research from the Center for Studying Health System Change indicates that hospitals are expanding their strategies to get commercially insured patients, such as building facilities right next to each other, incorporating hotel-like amenities and replacing safety-net clinics with revenue-generating health centers, reported Kaiser Health News.

Although the recession forced hospital leaders to lay off workers to control costs, they often said pauses in expansion into new geographic areas were "brief and temporary," the study states.

Such expansion often involves building new, full-service hospitals in areas with well-insured populations. For example, the Greenville Hospital System University Medical Center opened Greer Memorial Hospital in 2008, just as the Spartanburg Regional system finished building Village Hospital, both in the affluent community of Greer, S.C., according to the study.

Meanwhile, other hospitals are constructing freestanding emergency departments, allowing them to transfer patients to their own affiliated hospitals rather than nearby competitors. Another expansion strategy is to open ambulatory care facilities in new markets with commercially insured patients, then buying or developing physician practices to work there.

Even nonprofit hospitals are catering to affluent patients who are willing to pay more, with thousand-dollar suites and other luxury amenities such as chefs and butlers.

However, geographic expansion strategies are putting pressure on local hospitals. For example, local hospitals in New York are facing steep competition from urban hospitals that are opening up satellite facilities and forming partnerships with area providers. The suburban hospitals claim the out-of-town organizations are siphoning their most profitable patients, as well as some of their best physicians, FierceHealthcare previously reported.

For more information:
- check out the study
- here's the KHN article

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.