HealthLeaders-InterStudy, a leading provider of managed care industry intelligence, reports that Detroit-area hospitals have decided to assume serious financial risk by constructing expensive facilities despite slim positive operating margins. According to the latest issue of the Detroit Market Overview, local health systems anticipate long-term financial benefits from these investments.
"As in many large metropolitan markets beset by multiple healthcare challenges, Detroit-area health systems have two main financial strategies," said Patrick Powers, HealthLeaders-InterStudy senior analyst. "The first is building outpatient surgery centers, and the second is moving out to the growing suburbs, in this case Oakland and Macomb counties. The major health systems are searching for commercially well-insured patients to offset the costs of serving uninsured and underinsured Medicaid and Medicare patients in Detroit proper."
Two players -- Henry Ford Health System and Ascension Health's St. John Health -- are already building new hospitals in Oakland County after winning legislative exemptions from the Certificate of Need (CON) rules and defending the approvals all the way to the state Supreme Court. Among those looking to build in the area: McLaren Health Care Corp., which has proposed a project starting with medical offices and an ambulatory-surgery center, but also eventually including a 300-bed hospital; Beaumont Hospitals, which has bought land for a $47 million medical center and surgery center; and Wayne State University Physician Group, which plans to build an outpatient surgery center in Troy.
Other news about the Detroit healthcare market
The University of Michigan Faculty Group Practice is participating in an important Centers for Medicare & Medicaid Services' pay-for-performance demonstration, and other physician groups are piloting electronic prescribing and electronic office visit projects.
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