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Large for-profit companies dominate long-term care in Pennsylvania

| Friday, Nov. 16, 2012, 12:01 a.m.

Ownership of long-term care and rehabilitation hospitals in Western Pennsylvania and across the state is dominated by four national for-profit companies, according to a report by the Pennsylvania Health Care Cost Containment Council.

The opposite is true of acute-care hospitals in Pennsylvania and the Pittsburgh region. Of the state's 168 acute-care hospitals, 16 percent are owned by for-profit companies. It's 7 percent in Pittsburgh.

All 10 long-term hospitals in the Pittsburgh region are owned by three publicly traded companies: Kindred Healthcare Inc., LifeCare Holdings Inc. and Select Medical Holdings Corp. Statewide, 25 of the 27 long-term hospitals are owned by those three companies.

The state's two nonprofit long-term hospitals, in Philadelphia and Bethlehem, are run by Good Shepherd Rehabilitation, based in Allentown.

There are two rehabilitation hospitals in Western Pennsylvania, in Harmarville and Sewickley, and both are owned by HealthSouth Corp., a publicly traded company in Birmingham, Ala. HealthSouth owns eight of the state's 11 for-profit rehab hospitals.

There are eight nonprofit rehab hospitals in the state, including the Children's Institute of Pittsburgh.

Kindred Healthcare, based in Louisville, Ky., employs about 78,000 people at 2,212 health care facilities in 46 states, including 117 long-term care hospitals.

LifeCare is a Plano, Texas-based company that operates 27 long-term care hospitals in 10 states.

Select Medical, based in Mechanicsburg, owns 111 long-term care hospitals and 12 rehab hospitals in 28 states.

HealthSouth is the nation's largest owner of rehab hospitals, with about 100 in 27 states and Puerto Rico.

The Pennsylvania Health Care Cost Containment Council is an independent state agency in Harrisburg that collects and analyzes financial and quality data on the state's health care system.

Its report on long-term and rehab hospitals, released on Friday, found that the state's rehab hospitals are financially strong, with an average operating margin of 14.1 percent in the year ended June 30, 2011.

Both HealthSouth rehab hospitals in Western Pennsylvania had operating margins above the statewide average of 19.5 percent.

The state's long-term hospitals also turned a profit on average, but weren't quite as strong. While the two nonprofit Good Shepherd facilities had an average operating profit margin of 13.5 percent, the state's 25 for-profit long-term hospitals had an average operating profit margin of 4.3 percent.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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