Issue link: https://beckershealthcare.uberflip.com/i/1219854
12 CFO / FINANCE Advocate Aurora Health moves to double revenue in 5 years By Alia Paavola A dvocate Aurora Health, a 28-hospital system with dual headquarters in Milwaukee and Down- ers Grove, Ill., plans to more than double its an- nual revenue by 2025, according to the Milwaukee Business Journal. Under what it is calling its "bold new strategy," the health system plans to meet its goal through mergers and acqui- sitions of healthcare systems, health insurers and other healthcare products, the company said at the J.P. Morgan Healthcare Conference in San Francisco. Advocate Aurora, which has about 74,000 employees and more than 2 million patients, expects to end fiscal year 2019 with $12.8 billion in revenue. It established a goal to reach $27 billion by 2025. It also wants to increase the number of patients served to about 10 million. Advocate Aurora plans to become a "multimarket con- solidator," by buying hospitals and health systems. It also wants to consolidate with health plans and introduce new consumer products by creating or acquiring a health and wellness business. "This bold new strategy will ensure that our organization is well positioned for a strong and healthy future so we can lead the change and fulfill our purpose of helping more people live well," Advocate Aurora spokesperson Adam Mesirow told the Milwaukee Business Journal. Currently, Advocate Aurora Health is the 10th-largest nonprofit health system in the U.S. n Jefferson Health explores joint venture to fuel ambulatory growth By Emily Rappleye P hiladelphia-based Thomas Jefferson University and Jefferson Health plans to launch a joint venture with Toledo, Ohio-based Welltower, a real estate investment firm, as part of a strategy to better manage aging patients' social determinants of health and grow its ambulatory care network. The two organizations signed a memorandum of under- standing, they announced Jan. 13, and they expect to reach a definitive agreement in 90 days. The joint venture structure would allow Welltower to ac- quire a stake in Jefferson's real estate assets, so the health system could reallocate capital to other strategic areas. The partnership will also help Jefferson grow its ambula- tory network and better identify where clinical services are most needed. Welltower will gain access to Jefferson cli- nicians, who will provide care at the firm's senior housing, assisted living and memory care communities. "This partnership with Welltower will be a crucial step forward in achieving our 'healthcare with no address' in- novation strategy," said Stephen Klasko, MD, president of Thomas Jefferson University and CEO of Jefferson Health, in a press release. This is Welltower's first health system partnership. n Hospitals, not physicians, driving up healthcare costs for privately insured, study shows By Kelly Gooch H ospital prices are a bigger driv- er of healthcare spending growth for the privately insured than phy- sician prices, a study published in Health Affairs suggests. For the study, researchers examined Health Care Cost Institute data that included claims for privately insured people with health plans from Aetna, Humana and UnitedHealthcare. ey used this data — as well as American Hospital Association data and data on insur- ance coverage from the HealthLeaders-Inter- Study database — to look at growth in hos- pital and physician prices using negotiated prices paid by insurers. Researchers examined claims for inpatient care, outpatient care and four high-volume services: cesarean section, vaginal delivery, hospital-based outpatient colonoscopy and knee replacement. e study found that hospital prices grew much faster than physician prices from 2007 to 2014. Hospital prices for inpatient care climbed 42 percent compared to 18 percent for physician prices. Additionally, hospital prices for hospital-based outpatient care rose 25 percent compared to 6 percent for physi- cian prices, according to the study. Researchers attributed the majority of the growth in payments for inpatient and hospi- tal-based outpatient care to growth in hospi- tal prices, rather than physician prices. "Our work suggests that efforts to reduce healthcare spending should be primarily focused on addressing growth in hospital rather than physician prices," the study authors concluded. "Policy makers should consider a range of options to address hos- pital price growth, including antitrust en- forcement, administered pricing, the use of reference pricing, and incentivizing re- ferring physicians to make more "cost-effi- cient referrals." n