Becker's ASC Review

99 HEALTHCARE NEWS Physician-owned hospitals: 8 notes on 2021 and beyond By Laura Dyrda P hysician-owned hospitals persist despite the 2010 moratorium on inpa- tient growth for most facilities. In 2021, CMS removed the cap on the num- ber of operating rooms, procedure rooms and beds that can be approved for physician- owned hospitals at the main campus. Brown Gibbons Lang & Co., an independent investment bank and financial advisory firm, is bullish on the future growth of physician- owned hospitals. e firm released a July 26 report on the state of the physician-owned hospital industry, including an expert roundtable discussion on future merger and acquisition activity. "I think [physician-owned hospitals] con- tinue to remain a very viable investment for a lot of different types of potential partners," said Amber McGraw Walsh, a partner at Chicago-based law firm Mc- GuireWoods. "The partnerships are most typically about the opportunities they can unlock in terms of value-based care, operational efficiency, etc." Eight takeaways from the report: 1. ere are around 120 to 130 surgical hospitals in the U.S. with physician own- ers. More than half of the physician-owned hospitals are independent, and the rest have corporate or health system partners. 2. e breakdown of physician-owned hospi- tals by ownership structure: • Independent: 58 percent • For-profit partner: 38 percent • ree-way joint venture: 15 percent • Nonprofit partner: 9 percent 3. Bringing on a health system or corporate partner, such as Surgery Partners, United Surgical Partners International or Surgical Care Affiliates, can provide retiring physi- cians with high-value liquidity while also giving early-career physicians the opportu- nity to buy in or increase ownership. 4. Physician-owned hospitals can expand by adding ASCs and urgent care centers. Surgery centers are typically more successful for physician-owned hospitals and can be in- vestment vehicles for early career physicians in the market, according to the report. 5. Only physician-owned hospitals in markets with ha igh concentration of Med- icaid beneficiaries are able to expand the inpatient hospitals. 6. Outpatient surgery generates around 42 percent of physician-owned hospital revenue. Nonphysician-owned hospitals typically generate 28 percent of their revenue from outpatient surgery. 7. Brown Gibbons Lang predicts physician- owned hospitals will be highly competi- tive facilities in the emerging healthcare landscape focused on value-based care because they have lower price points than nonphysician-owned hospitals and rely less on inpatient surgery revenue. 8. Physician-owned hospitals are in a good position to become vertically integrated net- works or partner with payers in the future, according to Brown Gibbons Lang. n Baylor Scott & White demands physician stop using its name By Ayla Ellison B aylor Scott & White Health is suing a physician for allegedly claiming to be affiliated with the Dallas- based system. The physician says he hasn't claimed to be employed by Baylor Scott & White since leaving the system earlier this year, The Dallas Morning News report- ed July 29. Peter McCullough, MD, entered into a separation agree- ment with the health system in February. Baylor Scott & White alleges the physician is breaching the agree- ment by stating he is affiliated with or employed by the health system. Dr. McCullough has shared his controversial views about COVID-19 vaccines on the internet, in print and on television, and his "improper use of titles and claimed affiliations" have confused the public, the media and the healthcare community, the lawsuit states, according to the report. "The lawsuit was filed to enforce this separation and avoid public confusion," Baylor Scott & White said. "We take very seriously our responsibility to be a trusted source of medical information in the communi- ties we serve." The health system is seeking more than $1 million and an injunction stopping Dr. McCullough from "further misuse of titles and claimed affiliations," according to the Morn- ing News. Dr. McCullough's lawyer claims the health system is trying to silence the physician. He said Dr. McCullough tells pro- ducers that he no longer works at Baylor Scott & White, but the media continues to cite his former titles, according to the report. "Every single instance referenced by Baylor is something said/printed by a third party with no encouragement from Dr. McCullough," tan attorney for the physician told the Morning News. "Dr. McCullough does not and cannot control third parties." n

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