HealthLeaders-InterStudy, a leading provider of managed care industry intelligence, reports that a relatively unchanging economy and little population growth have allowed Harrisburg-area hospital systems to establish a stable provider market with limited competition. According to the latest issue of the Harrisburg Market Overview, except for Holy Spirit Health System, area health systems have enjoyed positive earnings, with Carlisle Regional, the only for-profit in the area, showing margins high enough to raise concerns among local observers.
"The five area health systems largely operate in their own geographic spheres," said Patrick Powers, HealthLeaders-InterStudy senior analyst. "In contrast to many areas of the country, where there is stronger competition, the only hospital construction undertaken locally has been to strengthen and upgrade existing lines of business. No one is expanding into new geographic areas. The only competition we're really seeing is from physician-owned ambulatory surgery centers. And even that relatively small amount of competition has led some hospitals to support the reinstatement of a certificate-of-need law to curb the growth of those facilities."
The Harrisburg-area healthcare market remains dominated by PinnacleHealth, which serves metropolitan Harrisburg. The potential for competition exists between PinnacleHealth and Penn State Milton S. Hershey Medical Center, which is in the midst of a 10-year, $500 million building program; but so far the systems have declined to intrude on each other's spheres of dominance.
In contrast, Harrisburg physician groups are competing with existing hospital facilities. In 2005, the $2.5 million Ophthalmology & Surgical Institute of Central Pennsylvania opened near Carlisle Regional, and a group of 14 surgeons opened the $3 million Physicians Surgery Center in Lebanon County near Good Samaritan's Lebanon Outpatient Surgery Center.
Other news about the Harrisburg healthcare market
Highmark Blue Shield may merge with one or more of the state's other Blues plans. Observers rate Independence Blue Cross the most likely candidate.
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