Volume 12| January 31, 2018
Insights-Trends-Opinions
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Top 50 IDNs by Revenue and Number of Hospitals
I recently came across a great list of the Top 50 IDNs by Net Patient Revenue. If you’d like a copy of the report, you can request it here.

Thanks to Definitive Healthcare for this list!
Not surprisingly, HCA Healthcare topped the list with $35 billion in revenue from its 205 hospitals and corresponding facilities. Following that, however, there were many surprises.Top 50 IDNs by the numbers:
  • HCA has twice the revenue of the second-place IDN, and have more than 25 percent more hospitals
  • The average Net Patient Revenue of the Top 50 IDNs is $7.2 billion (Total Revenue is $7.7 billion)
  • Top 50 IDNs average 40 hospitals
  • Half of the Top 10 are faith-based organizations
  • Stanford Health has the fewest hospitals in the Top 50 with only four
Amazon, JP Morgan and Berkshire join forces to start Healthcare Company
Interesting news that Amazon, JP Morgan and Berkshire are joining forces to start a Healthcare Company.

Not many details are released about what this will look like but here is what we do know;
  • These 3 companies are in the top 7 largest public companies
  • In total they employee 1m people
  • Todd Combs of Berkshire will lead the effort
The joint statement stated that the new company will "be free from profit-making incentives and constraints”  .

Is your hospital market share evaporating?
If you feel like your hospital-based market share is evaporating, you are not the only one....

In Paul Keckley's weekly report he substantiates what you may be feeling with cold, hard numbers;

  • In the last decade, admissions has dropped 12%
  • Acute bed capacity decreased 11%

Just look what has happened to the number of hospitals the last 45 years or so...

"Today, there are 4840 community hospitals, down from 7156 in 1975: 2849 of these operate as not for profit, 1035 are investor owned, and 956 are operated by state/local governments."

Is your business following the patient? If not don't be surprised if you feel like your market share is evaporating.

Just-in-time supplies may be making the U.S. vulnerable
The Washington Post seems to be really taking a leadership role in bringing the intricacies of the U.S. Healthcare Supply Chain to Main Street. It seems to me they are covering more and more stories pertaining to vulnerabilities in the medical Supply Chain in particular.

Here are some facts in WaPo's latest feature;
  • 80% of U.S. consumed pharmaceuticals are made overseas.
  • 43% of saline is made in Puerto Rico.

The article also dices into Just-in-time deliveries that put hospitals at considerable risk when demand is increased or deliveries are interrupted. The current flu situation and IV shortage has done just this to hospitals across the country.

Call me crazy but I do not think it is coincidence that the Jeff Bezos' controlled Washington Post is taking a leadership position in news and insight about the U.S. Healthcare Supply Chain.

Why hospital mergers are destined to fail
Pretty interesting article making the case that hospital mergers are destined to fail. Thanks to a loyal NAW reader for submitting this article!

Dr. Robert Pearl states " As health plans, pharmaceutical companies and new care-delivery entrants gain market clout at the expense of the hospital industry, panic is starting to set in. These developments have spurred a recent uptick in hospital mergers, which look more like deals of desperation than long-term growth strategies."

He further makes the case that the 2 main premises M&A is built on -- reduction of duplication and to increase clout -- are not at the core of why these mega mergers are occurring. Simply put, he eludes that the intestinal fortitude is not in the leadership DNA to actually eliminate redundancies and cost, rather just focused on a better market position to increase revenue.

It's a fascinating read, and I'd love to hear your thoughts.

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Thanks for reading this issue of National Accounts Weekly! Let me know what you think!

You are now in the know!

John Pritchard


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