“They were the big, integrated systems and they wanted to own every piece and part of the integrated system,” he said. “That would include, potentially, hospice, it would include maybe home health care, maybe skilled nursing and rehab. It would include buying up physician groups in all types of sizes.”
Much of that mentality is “if we own everything, then we can make sure, in theory, that we’re able to integrate everything” and possibly do so in a more cost-effective, value-based manner, Campanella said.
But what has happened over the past several years and accelerated during COVID-19 pandemic is the recognition by hospital systems that the money they get from Medicare, Medicaid and private insurers has continued to decrease, he said.
“There were more increased financial challenges and less reimbursement,” Campanella said.
So instead of owning everything and having to deal with numerous high-fixed costs, hospital systems realized they might be better off collaborating with other organizations that are experts in those areas, he said.
“The hospital is basically saying ... ‘Maybe we need to know and control each of those cost elements and either we own it or we collaborate with a third party so we can control our costs, because if we go over budget ... we’re the ones that are going to be losing money,” he said.
The benefit to patients is being in a skilled nursing facility where they have the right type of equipment and trained individuals “where a specific kind of health care is all they do.”
John Palmer, spokesman for the Ohio Hospital Association, said recent Ohio activity includes Encompass Health announcing last month the opening of Encompass Health Rehabilitation Hospital of Toledo, the company’s fourth inpatient rehabilitation hospital in Ohio.
In addition to inpatient and outpatient rehabilitation services, Encompass Health also has other services in Ohio such as home health in the Canton area. In Delaware County/Westerville area, Encompass Health and Mount Carmel established a facility together, Mount Carmel Rehabilitation Hospital, in 2018.
Hamilton County facilities include Encompass Health Rehabilitation Hospital of Cincinnati and Encompass Health Rehabilitation Hospital of Cincinnati at Norwood.