Mark Henrichs, CFO of Iowa City-based University of Iowa Health Care, recently told Becker's he sees partnerships as the "wave of the future" in healthcare.
He is not alone. Bradley Bond, who will become Cleveland-based University Hospitals' CFO on Feb. 1, said the system has shifted its interest away from brick-and-mortar acquisitions and toward partnerships.
Mr. Henrichs said one example of a partnership involving his system was the opening of the University of Iowa Health Network Rehabilitation Hospital with Encompass Health in June 2020.
"The combined effort met a need for these services for the University's patient population, and brought together the expertise of the two entities to improve the care continuum and outcomes for patients needing these services," he said. "This has resulted in great outcomes that are above national averages for mobility, functional efficiency and success in returning to home quicker than care protocols prior to the joint venture."
Another example is a 10-year value partnership with Siemens Healthineers that he said brings "innovation and financial benefit to UI Health Care." Initiatives utilize artificial intelligence and data analytics to "improve performance and efficiency, expand research opportunities, and invest in workforce training and development for staff and students."
He said the system is continuing to work with possible partners on "ways to bring together expertise and investment in a way that truly changes healthcare outcomes for our patients."
An example at University Hospitals includes partnerships with hospitals in Western Ohio for certain service lines. Mr. Bond said partnership does not require an acquisition of a hospital or spending a lot of capital. He said acquisitions tend to be capital heavy and "given the pandemic and the impact on our cash flow, we want to continue to strengthen our balance sheet."
"Secondly, the market is mostly consolidated in Northeast Ohio now," he said. "There is not a whole lot of market share to gain through consolidation. Finally, you have to recognize a very large shift from the inpatient setting to the outpatient setting. Inpatient hospitals are being used less and less frequently. We're doing more and more on the outpatient side. All of those factors lead us — and many other systems are saying the same thing — toward joint ventures and partnerships and away from physical asset acquisition of inpatient beds."