Looking to expand its reach in South Florida and to position itself for the future of healthcare reform, Larkin Community Hospital in South Miami announced this week the purchase of Palm Springs General Hospital in Hialeah for about $40 million.
Florida healthcare regulators have yet to approve the sale or issue a license for Larkin to operate the hospital. Jack Michel, a physician and board chairman, said Larkin administrators had mailed the required closing documents to the state’s Agency for Health Care Administration on Tuesday for final approval.
Michel said Larkin does not plan to lay off physicians, nurses and other employees of Palm Springs. But he said the hospital system will appoint Iris Berges, currently a vice president for Larkin, as chief executive of the newly acquired hospital.
“We’re keeping the staff,” he said. “We’re evaluating, of course, every department like we normally would. But there’s no plan to do a major turnover.”
We’re keeping the staff.
Jack Michel, chairman of Larkin Community Hospital
Palm Springs currently has about 700 full-time employees, including 300 physicians on staff. The hospital, which was privately held, lost about $3.4 million on operations in 2013, state records show. Its primary source of patient revenue came from Medicare.
The acquisition of Palm Springs, a 247-bed hospital, gives Larkin a total capacity of 775 patient beds spread across three medical centers in Miami-Dade and Broward counties — including a behavioral health center in Hollywood — and the ability to offer a broad scope of integrated healthcare services.
Michel said that in order for hospitals to thrive under the reforms of the Affordable Care Act, they must form integrated systems to cover a range of services from surgeries and family practice to assisted living, skilled nursing, psychiatric therapy and rehabilitation.
“The key for us,” Michel said, “has been to try to provide the continuum of care, not just acute care.”
$40M Purchase price for Palm Springs General Hospital
Michel said the acquisition of Palm Springs gives Larkin a greater presence in North Miami-Dade while also allowing the hospital system to train more doctors in more medical specialties, including dermatology and internal medicine.
This year, Larkin has a class of about 250 physicians in postgraduate training in 32 different specialties, Michel said. He expects that class to grow to about 270 physicians when a new group of medical residents begin training in July.
Michel said one advantage of building an integrated hospital system and teaching program is the ability to train physicians to work with pharmacists, nurses and other healthcare providers.
The goal, he said, is to position Larkin for a future where government programs, such as Medicare and Medicaid, and private insurers pay healthcare providers a predetermined amount for an entire episode of care — as opposed to reimbursing different providers on an individual basis for different services.
“Ultimately what you need is something like what Kaiser Permanente has in California — a fully integrated delivery system where you get one payment to keep the patient healthy.”