Worcester Business Journal

wbjournal.com | February 6, 2017 | Worcester Business Journal 9 Trending towards profits For-profit hospital ownership has trended upward in Massachusetts and the U.S., with a 10-percent gain in the Baystate between 2005-2015. Source: Kaiser Family Foundation '05 0 5% 10% 15% 20% 25% 30% 35% 40% % for-profit, U.S. % for-profit, Mass. 22.4% 21.3% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 For-profit havens Massachusetts is dominated by nonprofit hospital providers even though for- profit hospitals have increased their market share. For-profit hospital owner- ship is far more common in the southern United States. Here are the top five states by percentage of for-profit hospital ownership. Source: Kaiser Family Foundation Florida Nevada New Mexico Tennessee Texas 51.4% 50% 44.4% 43% 39.9% the home health care division previous- ly owned by Worcester-based Fallon Health and VNA Home Care, both local nonprofits. The Louisiana company acquired Home Staff because it was its most seri- ous competition in Central Massachusetts for home health care, said Trigilio. Now, it will be the major competitor for smaller home health players, with Amedisys having edge in terms of scale and expertise in compre- hensive home health services. "You're really measured based on your quality, and how you achieve what you set out to do," Trigilio said, noting for-profit and nonprofit healthcare operations aren't significantly different. The Home Staff acquisition is the lat- est in a string of for-profit providers moving into the region, including the state's second largest player – for-profit Steward Health Care System in Boston – making inroads through its planned acquisition of the Central Massachusetts Independent Physician Association. These are in addition to the region's existing major for-profit provider: Tenet Healthcare, the owner of Saint Vincent Hospital in Worcester and MetroWest Medical Center with campuses in Framingham and Natick. Looking at data, focusing on margins Edward Moore – president and CEO of nonprofit Harrington HealthCare in Southbridge, who formerly worked at MetroWest Medical Center when it was owned by Tenet Healthcare of Dallas and for-profit Vanguard Health Systems of Tennessee – said there are differences between the for-profits and nonprofits approach to medicine For-profits are "very data driven. That's not to say the nonprofits aren't but … they have greater capability because of size and corporate structure to invest in analytics," Moore said, including, "a big focus on making sure that shareholder expectations are met." Of course, nonprofit healthcare pro- viders look at profits, too, but instead they call them surpluses. UMass Memorial Health Care, for example, posted $68 million in surplus for 2016. David Schildmeier, spokesman for the Massachusetts Nurses Association and a veteran healthcare public relations expert, said nonprofit and Amedisys Inc., a for-profit home care provider based in Louisiana, offers services to help people remain independent while avoiding moving to nursing care facilities. The company is establishing a Worcester hub through its latest acquisition. for-profit providers today are similar in their approach to providing services, because the state did away with a healthcare rate-setting process in the 1990s in favor of a deregulated competition. "It's all about the budget," Schildmeier said. "How can we maxi- mize the budget – and the surpluses?" Healthcare providers are under increasing financial pressure because of changes in federal reimbursements and because of state healthcare reform aimed at curbing cost growth. Profits, for the mission These pressures led to a strategy toward profitable ventures at UMass Memorial Health Care, said Dickson Through its UMass Health Ventures Inc. division, UMass Memorial has inked affiliations with for-profit health- care companies with specialty niches, such as Shields MRI and Carewell Urgent Care. A new affiliation with for- profit ATI Physical Therapy, a national provider, is undergoing a review by the state Health Policy Commission. The affiliations generate profits, said Dickson, and those are spun back into the system to fund other services that he called mission-oriented, which are necessary programs the system loses money on, such as funding for UMass Medical School and treatment of the uninsured. "We want to work with excellent for- profits that are willing to give up a por- tion of their venture … to support the mission-oriented activities," Dickson said. "It's all about the budget. How can we maximize the budget – and the surpluses?" - David Schildmeier, spokesman for the Massachusetts Nurses Association P H O T O / C O U R T E S Y W

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