Some hospitals have been making moves that are shaking up Wall Street.
By buying smaller hospitals that don’t have the resources to continue to serve their patients — and taking steps to make them more successful.
A few public U.S. hospital chains, such as Community Health and Health Management Associates, Inc., have been buying out struggling nonprofit hospitals for bargain prices and turning them into successful facilities by improving the services they offer and upgrading technology.
Their efforts are gaining attention from investors, who see opportunities for long-term success in these health systems. Because medical care is in such high demand, investors are starting to see them as sources of revenue.
This biggest group of future healthcare consumers are Baby Boomers, who will retire in the next decade or so. As this generation ages, they’ll require increased medical attention and care. The healthcare industry will become increasingly more important and active. In order to attract these patients to their hospitals, public health systems are putting more money into technology and construction projects.
Nonprofit hospitals benefit from these consolidations, too. For-profit facilities are typically better-run and receive greater financing. Bigger systems can help recruit doctors for positions that are hard to fill — upgraded facilities and networks of large groups of patients can be enticing to specialists, who have more opportunities to expand the scope of their practices.
This trend doesn’t seem to be slowing down any time in the near future. As mentioned previously, Community Health is an example of a health system that has achieved success in revamping smaller hospitals. In the past year, it’s bought 15 hospitals, and is expected to spend between $800 and $900 million on capital investments this year, alone.