Wednesday, June 30, 2010

Is this the classified ad section?

I received this email on Sunday night. Perhaps it is just me, but it feels weird to get a solicitation like this, as though this were just a house or condominium building for sale. Note the postscript, too. Are hospitals now commodities?

80 Bed Hospital in a Southeast, Certificate of Need State For Sale

Dear Paul,

[Company name} has been retained to identify a buyer for an 80 bed, accredited, regional hospital in the Southeastern portion of the United States. The hospital is located within a community that is less than fifty miles from a major business hub with a population of over one million people.

Revenues are in the $20 million range and the business is profitable. The asking price is to be determined by using the lesser of the traditional formula of 100% of the trailing twelve months of revenues or simply $250,000 per bed.

The sellers are asking only qualified buyers to first submit their request for more information, after which they will be considered to privately participate in the owners' agenda to divest its facility and excess land. As this is not an auction, the sellers will convey title for the hospital and land to the first buyer who is able to close the transaction. Prior to the conclusion of the acquisition, they will preserve total discretion as to the confidential nature of the transaction.

Your request to be considered will be delivered to the Managing General Partners for their approval once you have signed a Non-Disclosure Agreement. Thereafter, a package will be available for immediate review with the intent to schedule a Conference call with one of the principals. We welcome all inquiries.


[name omitted]

Sr. Vice President
[company name]

PS: Are you curious about what hospitals are worth in today's market?

Call me at


Amy said...

Interesting. I would be tempted to call the number provided out of pure curiosity to see what they had to say, but wouldn't want to get sucked into a sales pitch.

Thanks for sharing!

Anonymous said...

I have heard physicians also complain that their services are now commoditized. In fact the entire system is really becoming so. Perhaps this is inevitable in our capitalist-mad society, but when it's your life instead of your car or house, the consequences are not small.

nonlocal MD

Jane Sherwin said...

Perhaps they are actually based in Nigeria . . .

e-Patient Dave said...

You bet your @$$ hospitals are commodities, in the eyes of the managers who are the root of this industry's problem.

Just a hunk of meat, to be managed for ROI - sold to any buyer. Just an investment.

A natural consequence in some hospitals is mindless cost-cutting. I was disturbed to see in this month's Health Leaders a discussion of Lean, in which an industry executive said "The key is you have to right-size staff-to-patient numbers." Ugh. Totally, 100% wrong; that's never the goal of Lean. Even I know that, after reading Mark Graban's Lean Hospitals for your Lean workshop. (Thanks again to Alice Lee and team for that great event.)

You betcha a hospital is just a hunk of meat - unless compassionate leadership makes it otherwise. (Can you tell I'm starting to feel strongly about this?)

Hal Andrews said...


In the past year, you have seen first-hand the gut-wrenching challenge of the business side of a hospital. It is continually stunning to see people who are blind the fact that the revenues have to exceed the expenses to pay the line item called salaries. It is a reflection of how much a hospital is part of the fabric of a community that people actually try to find someone else to make a go of a hospital instead of simply shutting it down.

Anonymous said...


So you tell me I am betting my money @ somewhere??!!

I gather this ad concerns a profitable, for-profit hospital. One wonders if we will see a similar ad from Cerberus in 3 years??!! (meow!)


Anonymous said...

From Facebook:

Yogesh: This would have sounded very real in India with big private hospitals (Corporates) competing to gobble the smaller well located but poorly performing entities. The Medical business here is booming by feeding itself on Insurance and the growing Medical Tourism. I am surprised that you have not yet been approached by somebody from here. Your credibility in the healthcare business is growing and seems to be appreciating more in the 'big' business circles. After all, economics decides the bottom line.

Paul: I think they are until they stop acting like commodities--there's a need to see beyond their own marketing schtick.

Urrooj: Interesting to know the going rate.