An article in the January 2016 issue of Business Valuation Update provides a recap of several sessions at the recent AICPA 2015 Healthcare Industry Conference in Las Vegas. In one session, several hospital CFOs participated in a panel moderated by Britt Tabor (Erlanger Health System). The panelists were Geoff Gardner (Novant Health), Lori Ritchey-Baldwin (St. Elizabeth Healthcare), and Steven R. Blake (Paladin Healthcare Management, LLC and Avanti Hospitals). They pointed out that many healthcare valuators are surprised to learn that retail healthcare is a huge financial concern—second only to changing reimbursement models. Retail healthcare are the urgent care centers, Wal-Mart and CVS clinics, and the like springing up as patients become price-shopping consumers also looking for convenience. It’s a trend that’s growing and it’s here to stay, the panel says.
In response, some hospitals are entering the retail sector. “We invested in it,” reports Richey-Baldwin, indicating that her organization is a participant in retail health. Gardner says that Novant Health has moved into urgent care centers by opening up their own (Novant Health Express), partnering with some existing urgent care centers or investing in others. Urgent care is “great for kids and millennials” so it’s attractive to Novant—and many other hospitals. Blake’s hospitals are not-for-profit, so he says they are not looking to get into retail healthcare.
In terms of the new insurance exchanges, Gardner reports that patient volumes have increased even though the exchanges offer high-deductible plans. Possibly, people had been putting off health care until they got any kind of insurance. Has this increase in volume of these types of patients increased bad debt? No, says Richey-Baldwin, and the other panelists agreed.