Hospitals: How to Tackle Your Stranded Assets Under Value-based Care

The transition to value-based payment models has left hospitals—particularly those in the acute-care sector—with a vast physical infrastructure of strategic assets that can now be considered uneconomic, or stranded.
Using data analysis and visualizations, BDO’s Ejaz Elahi and Lauryl Campbell examine this phenomenon, exploring causes and effects of stranded strategic assets for these hospitals and suggesting potential recovery strategies.
Their sample includes 2,948 U.S. acute-care hospitals with 25 or more licensed beds. They estimate these hospitals have about $160 billion (about 40 percent of the US hospital fixed-asset base) tied up in stranded assets.
The study’s top-line findings include:
  • Half of U.S. hospitals are likely to have stranded assets.
  • All states have hospitals with stranded assets, but Maine and Massachusetts have the highest net strandedness, while Utah and Alaska have net surpluses.
  • Certain factors, including revenue pressure and the shift of inpatient care to lower-cost sites, have contributed to asset strandedness.
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