The system's two announced hospital acquisitions, Shamokin Area Community Hospital, and (as of Thursday) Bloomsburg Health System fall within Geisinger's central market with Danville, and the 415-bed Geisinger Medical Center, as its hub.
What's Geisinger getting out of the deals? Well, Geisinger will gain two hospitals in a market where the system already claims one out of five hospital discharges and the majority of its roughly 840 physicians operate.
But more market share did not drive the deals, says Frank Trembulak, Geisinger's executive vice president and chief operating officer. Instead, the health system will convert both hospitals into satellite campuses of Geisinger Medical Center to absorb less-complex patients and services and gain needed capacity.
Bloomsburg Hospital is only seven miles away, he says. The Shamokin Area Community Hospital is 17 miles from Danville. Satellite campuses will open beds for acutely ill, complex patients at Geisinger Medical Center—a hospital with resources to treat them and higher overhead as a result, he says.
Trembulak says officials believe Geisinger, which will install its health information technology at both hospitals, can improve operations at both systems. Operating losses “didn't dissuade us because we know we have enough business to put there,” he adds.
Geisinger—which ended 2010 with $127 million in operating income off $2.3 billion in revenue—will absorb two hospitals with operating losses, according to financial statements and state records.
Bloomsburg Health System lost $1.3 million on operations last year with revenue of $64.3 million, the system's financial records show. The system includes a physician group and the 72-bed Bloomsburg Hospital. Last year's loss followed a $2.9 million operating loss for 2009 on revenue of $63.2 million.
Meanwhile, the 70-bed Shamokin Area Community Hospital, Coal Township, Pa., which Geisinger agreed to acquire last November, lost money on operations during both fiscal years as well, state records show. The hospital lost $1 million on $34.5 million in patient revenue in 2010 and $859,000 on patient revenue of $35.2 million the prior year.
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