Los Angeles Times Examines Turnaround Efforts at Physician-Owned Midway Hospital Medical Center
The Los Angeles Times on Monday examined turnaround efforts at Los Angeles-based Midway Hospital Medical Center, which was purchased from Tenet Healthcare last year by Physicians of Midway, a group of doctors who have worked at the hospital.
The seven doctors hope to "make a reasonable return on their investment and [are] plow[ing] money back into Midway in a way its corporate parent hadn't for years," the Times reports.
The doctors' business plan calls for positioning Midway as a more convenient, less-crowded and less-expensive alternative to larger hospitals in the area. To accomplish this goal, the doctors have been "poring over individual bills" to find opportunities for cost savings in such areas as prescription drugs, cleaning supplies and medical implants, the Times reports.
"We are looking at everything," Shahram Ravan, one of the physician-owners, said, adding, "These are the strategies of survival."
The doctors also are investing in new services to improve care and increase the hospital's profit margin. Efforts include adding new technology, such as microwave ablation for cancer treatment and expanding the hospital's joint-replacement, sports-injury and weight-loss programs. The doctors also are working to increase the emergency department's capacity to handle critical patients by constructing a $1 million urgent care center for minor conditions.
Building on the hospital's turnaround successes so far, about 50 of the 600 doctors with admitting privileges at Midway have joined the original investor group. Because they now have a stake in the hospital, many of the doctors are willing to work on weekends, which has raised the number of weekend discharges, resulting in more savings.
According to the Times, it is "too soon to know if the doctors will save Midway," but they expect to return the hospital to profitability by the end of the year.
According to the Times, physician-owned hospitals "are as rare as house calls," although their "numbers are growing," with as many as two dozen of California's 353 hospitals owned by doctors, double the number from a few years ago.
Jeremy Hogue, founder of Sovereign Healthcare, said physicians are driven to enter the hospital-ownership business out of a desire to have "more control over the quality of patient care" in part because doctors "have none" right now.
However, the Times reports, purchasing a hospital is a "risky business" for physicians.
Lark Galloway-Gilliam, executive director of Community Health Councils, said it remains to be seen whether doctors can turn around financially ailing hospitals when large chain operators have had difficulty doing so.
"These are trying times," she said, adding, "The real question is: 'Do these people have the staying power, the resources and the knowledge to run these hospitals?'"
Other concerns include the possibility that physicians with financial stakes in hospitals could have a conflict of interest when it comes to patient care, the Times reports (Girion, Los Angeles Times, 2/21).