From Modern Healthcare:
Hospitals continue to add physicians at a brisk pace, defying predictions that the practice acquisition binge would end in a fiscal fiasco.
Unlike the 1990s, when system purchases of physician practices led to losses and an unwinding of many deals, hospital systems this time around appear to have found a way to absorb the costs associated with employing physicians, which usually include a steep overhead tab and the higher salaries and benefits paid for office-based specialties. Experts point to the welcome influx of paying patients from healthcare reform, efficiencies associated with hospital consolidation and the continued improvement in the overall economy as factors offsetting those higher costs and cushioning hospitals’ bottom lines, at least for the moment.
But just as significantly, hospitals have taken a number of steps to hold down costs related to their physician-practice acquisitions. They include leveraging their heavy investment in health information technology, focusing their acquisition strategy on primary-care practices and moving quickly to standardize physician activities at the newly acquired practices.
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