For-profit chains seek to acquire successful not-for-profit hospitals
Phillips, J.F.
Healthcare Financial Management Journal of the Healthcare Financial Management Association 53(9): 52-55
1999
ISSN/ISBN: 0735-0732 PMID: 11066707 Document Number: 504200
Over the last decade, investor-owned hospital corporations have grown primarily by acquiring other for-profit hospital chains or stand-alone for-profit institutions. Between 1990 and 1995, however, these corporations also acquired nearly 50 not-for-profit hospitals and converted them to for-profit status. An examination of the long-term financial condition of 39 not-for-profit hospitals acquired by various investor-owned hospital corporations between 1992 and 1996 was conducted using free-cash-flow accounting valuation. The results suggest that, initially, only not-for-profit hospitals in dire financial straits were candidates for acquisition and conversion to for-profit status. More recent acquisitions increasingly have involved more successful not-for-profit hospitals.