In the book “Creative Capitalism” the author very briefly touches on an idea of privately owned hospitals and it got me thinking, why are there no privately (or publicly traded) chain hospitals?
Around where i live there is a orthondontics and dentist office that privately owns half a dozen practices. There are privately owned medical facilities.
But why have i never heard of a privately owned chain of hospitals.
There are many hospital chains. Here’s one:
That one is privately owned. Tenet Healthcare is a publicly traded hospital company, and there are others. There are also many not-for-profit hospitals, including ones affiliated with universities and religious groups.
There are actually more chain hospitals than you think.
Just off the top of my head, Providence Health & Services and Kaiser Permanente come to mind.
There are lots of them, the problem is the business tends to be selective and regulated to the hilt so not a whole lot of people want to start them, much less invest in them.
In Indiana there is a trend for private hospitals that do surgery and the like but no E/R. This has the “traditional” hospitals in a snit, 'cause that allows for cherry-picking the top and richest patients.
In Illinois, one has to have a “certificate of need” showing that a hospital is needed. Of course this is good in that it prevents cherry picking of patients but clearly in areas like Tinley Park/Orland Park and Naperville are underserved and can’t get a needed hospital because of opposition of hospitals in the area. If you have to drive 30 minutes to an E/R in the suburbs in my opinion a hospital should be built but the opposition hospitals don’t want it 'cause it’d take away affluent clients.
And that is just one regulation.
So basically you have a heavy regulated industry with all kinds of rules. It’s just easier to start another kind of business. So instead of a hospital one would open a day-surgery or a clinic type deal.
Inova owns several hospitals in Northern Virginia.
According to this, four of the top 10 hospital chains in the U.S. are publicly traded. It looks like just those four have about 400 hospitals.
I know of a chain hospital here in my neck of the woods: Aurora Health Care. When they built their hospital in Green Bay, they built it so that if the hospital failed, it could easily be converted to a hotel. They have been putting pressure on some of the smaller clinics to sell their practices to them, so they can open more clinics, have more docs, etc. My mom is a doctor and left the area because of what Aurora was doing to medicine in the area. Instead of people turning against it, they embraced it, so all the other hospitals became more and more like Aurora…