Publisher's Letter: February 2012

Here are five core concepts for healthcare providers this year, as well as observations on key healthcare delivery trends during 2011.

1. Substantial shifting of healthcare providers. 2011 was an absolutely fascinating year in terms of pieces moving around the healthcare map. We saw an uptick in the amount of acquisitions by hospitals of hospitals and practices. Irving Levin and Associates reported that the top 10 hospitals mergers were valued at $5.6 billion in 2011, up from $3.8 billion in 2010. A recent Price Waterhouse Health Research Institute survey reported 46 percent of physicians are interested in hospital employment. This type of interest is consistent with the number of practice transactions we are seeing.

2. Assessing acquisitions, independence. We expect that in 2012 parties will be spending a good deal of time digesting the acquisitions they made last year and making sure that they have met their expectations. We expect independent hospitals and independent practices to take a deep breath and really assess their situation before aggressively moving forward to give up their independence.

3. ASC transactions, out-of-network, going public and more. The surgery center industry also saw a number of transactions involving national companies and hospitals buying surgery centers. We also saw (1) big chains pursue wholly the model whereby they partner with hospitals to acquire centers, (2) a return of big chains buying centers without hospital partners and (3) a couple large chains showing continued interest in acquiring physician-owned hospitals. In this sector, we also continue to see more and more aggressive action by payors as to out-of-network patients and increased effort to scramble for independent physicians to fill slots in surgery centers. We expect a few large ASC chains to test the public markets in 2012.

4. Increased governmental investigations. In 2011, we also witnessed significant increases in governmental investigation on a whole variety of fronts, including physician hospital relationships, false claims and billing and coding claims. With more integration of both providers and of payors, we expect more antitrust claims as well. Further, with more healthcare fraud investigators on the street, there will most likely be increases in anti-kickback and Stark Act investigations. RACs will also have an increasing material impact on hospital net income.

5. 2012 Developments. We expect 2012 to be a very interesting year. There will be (1) a Supreme Court decision on the Patient Protection and Affordable Care Act’s constitutionality, (2) a presidential election and (3) a great deal of overall uncertainty in the markets as to the direction of the country, and as to the direction of the healthcare sector.

6. Becker’s Hospital Review Annual Meeting — Great Topics and Speakers Focused on ACOs, Physician-Hospital Integration, Improving Profitability and Key Specialties. The Becker’s Hospital Review Annual Meeting will be held May 17-18 at Hotel Allegro in Chicago. The two-day event will be co-chaired by Chuck Lauer, former publisher of Modern Healthcare, and Scott Becker, publisher of Becker’s Hospital Review, and will feature keynote speakers Bob Woodward, Coach Mike Ditka and Suzy Welsh. More than 40 hospital and health system CEOs, CFOs and COOs will be featured among the event’s 124 speakers and 74 sessions. Register Today! by visiting www.regonline.com/beckershospitalreviewannualmeeting_ 1041813. Registrations received before April 1 will receive a discount.

Should you have any questions or if we can be of help in any manner, please do not hesitate to contact me at sbecker@beckershealthcare.com or call me at (800) 417-2035.

Very truly yours,
Scott Becker

P.S. If you are interested in exhibiting at or sponsoring the Annual Meeting or advertising in our publications, please contact Jessica Cole at (312) 929- 3675 or jessica@beckershealthcare.com for more information.

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