A new survey by Noblis Health Innovation found nearly a third of hospitals surveyed are “much more interested” in affiliation than a year ago.
Affiliation is the process of two health systems forming a partnership to deliver health services. According to the survey findings, interest in affiliation is highest among organizations with existing affiliations or organizations with deteriorating operating margins.
The study is the first in a series of surveys to be conducted by Noblis, a non-profit advisory firm.
“Over the past six months, we have observed an increased interest among our clients in exploring affiliation options,” said Kathleen Henchey, principal at Noblis Health Innovation. “To develop a better understanding and to jump-start the insights panel, our goal was to collect and share information about the number of hospitals that are interested in or are planning to affiliate and discover their reasons why.”
The study’s findings also suggest that affiliation may help the bottom line. Ninety percent of surveyed organizations with existing affiliation relationships have break-even or better operating margins, while only 65 percent of the unaffiliated are in the black. Organizations with deteriorating operating margins are more likely to express interest in affiliation than are those with stable or improving margins.
Panelists who are part of already affiliated organizations reported being most interested in gaining access to new geographic markets through affiliation, while independent organizations were more interested in using affiliation to enhance their access to capital.
The survey was conducted online among 84 participants from hospitals, post-acute providers and physician organizations.
The Noblis survey follows the April release of an American Hospital Association survey of 1,078 hospitals that confirmed the economy is taking a toll on hospital finance. The AHA survey found six out of 10 hospitals have seen an increase in emergency room patients without insurance – while nearly half of all hospitals have cut staff.
Richard Umbdenstock AHA president and CEO, said U.S. hospitals are struggling with the new economic climate.
“Hospitals are walking a tightrope, trying to balance the growing needs of their communities with today’s economic challenges,” said Umbdenstock.
In February, the Bureau of Labor Statistics showed hospital employment is no longer growing and layoffs for hospitals have more than doubled since a year ago.