An illustrative example

Paul Levy had questions of the clinical efficacy of a new piece of equipment that other organizations have been purchasing.  His post today is a perfect illustration of health care rivalry, not competition:

Without making any representations about the relative clinical value of this robotic system versus manual laparoscopic surgery, I am writing to let you know we have decided to buy one for our hospital. Why? Well, in simple terms, because virtually all the academic medical centers and many community hospitals in the Boston area have bought one. Patients who are otherwise loyal to our hospital and our doctors are transferring their surgical treatments to other places. Prospective residents who are trying to decide where to have their surgical training look upon our lack of the robot as a deficit in our education program. Prospective physician recruits feel likewise. And, these factors are now spreading beyond urology into the field of gynecological surgery. So as a matter of good business planning, concern for the quality of our training program, and to continue to attract and retain the best possible doctors, the decision was made for us.

Treatment so fast you’ll freak

I listened to someone speak today while taking advantage of a provided lunch.  The lunch consisted of subs from Jimmy Johns.  The person said “Jimmy Johns is pretty cool, Subs so Fast You’ll Freak.”  Subs so Fast You’ll Freak is a marketing tagline used by the company.  The person continued, “Maybe hospitals should be ‘treatment so fast you’ll freak.'”  It was an off-the-cuff comment, but you know, thinking like this just might be our problem.

Wasted: Health care spends like a drunk sailor

Impassioned plea for action.

The biggest problem with waste in health care: it’s easy to talk about, much harder to get rid of.

And the pertinent question at this point is this: did this problem arise because of government involvement or despite it?  And the even more prescient brainteaser: will this problem be more likely solved with more government intervention or less?

Finally, (and this post is not meant as an endorsement of a particular health care payment philosophy) can a market-based health care economy bring about the needed reform or will it take a czar of American health care?

Oh, and the other thing about waste: that money is someone’s income or an organization’s bottom line.  Expect actions to reduce it to be battle-like.  We’ve definitely got some work to do.

Show them the money

The hope is that this credit crunch is a short-term pain.  No one knows, of course.  Anything longer than what experts consider short-term may ignite a perfect storm with massive consequences to the health care industry.

From The New York Times:

Tight credit is adding to a financial challenge that some hospitals are already facing, as greater numbers of patients are unable to afford the rising out-of-pocket portions of their medical bills or lack insurance altogether. Many hospitals say they are already seeing an increase in their bad debt — money they bill patients for but cannot collect.

And that problem could get worse, as people worry first about paying their mortgages and credit card bills before dealing with their medical bills, said Gary Taylor, a hospital analyst at Citi Investment Research. “We’re worrying about collection rates falling,” he said.

Whoa, Detroit is cheap, probably spells doom for hospitals

Directly below this post is a link to a story from The Wall Street Journal that describes the plight of an urban Detroit hospital.

The Detroit Free Press outlines what may be one of the contributing factors (via Richard Florida):

Driven down by sales of foreclosed homes, median sale prices fell 34% in metro Detroit in September compared with a year ago, dipping below $10,000 in the city of Detroit.

The median price on a house or condo sold in Detroit last month plummeted 57%, to $9,250, from $21,250 a year ago, according to figures released Monday by Realcomp, a multiple listing service based in Farmington Hills.

Reaction: !

Why there is dislike for administrators

Because at a moment of obviousness, it just isn’t.  Read about the issues at this hospital system (link via Kevin MD).  Dr. Robert E. Khoo offers some steps to success:

What should Memorial do? It could start by listening and responding to physician and nursing concerns, better organize its system of care delivery and health information, focus on the patient not on budget cuts and not bow to pressure from its headquarters in Orange County. The delivery of health care is unique to this community. We are underserved, and the problem is growing.

Sounds simple.  Message: Make delivering health care easier, not more difficult.  Often it’s not this easy, but sometimes it is.

Health care demanded

Some companies are starting on-site medical clinics in an effort to combat constantly rising health care costs.  The Pioneer Press reports on a St. Paul-area company’s decision to do just that.

Here is the truly interesting take away from the story:

The manufacturer opened an on-site clinic Wednesday that will provide free primary care to its 450 workers and their families. Two workers showed up right away, and one with pneumonia sought care during Thursday’s ribbon-cutting. (emphasis added)

During the ribbon cutting! Is this an indication of the state of health care?  Where people forgo necessary treatment until an affordable option presents itself?

Apparently so.  And it’s not good.

Unfair criticism, the uninsured, and health care realities

The University of Chicago Medical Center is drawing criticism over a “strategy to steer poor and uninsured patients with less serious injuries to other facilities to focus on treating the most challenging cases,” especially from the non-profit sheriff Senator Chuck Grassley according to the Chicago Tribune.

Meanwhile, newly appointed Grady Memorial Hospital CEO Michael Young took a swipe at Atlanta-area hospitals saying “I think the other hospitals need to do a gut check on their missions, and see if they’re doing their fair share,” at a recent news conference reported by The Atlanta Journal-Constitution.

We all know hospitals that fulfill their non-profit missions daily; and we all know hospitals that could improve.  Our health care system presents difficulties in treating patients who are not properly insured.  Non-profit or not, hospitals need to keep their doors open.  Whether it is a new strategy to treat uninsured patients outside of the emergency department or a plea to other leaders to help carry the load, hospitals are increasingly pursuing new efforts to sustain themselves.

The realty is that most hospitals try to limit the number of uninsured patients they care for—it’s happening in every metropolitan area throughout the United States.  Some try harder than others.  Some are more transparent in their efforts than the rest.

Whether you consider what the University of Chicago Medical Center is doing is right or wrong, the problem with the criticism is this: the reason they have come under fire is because they have been transparent in their efforts.  We know about what they are doing because they have openly communicated it.  Being singled out is wrong when there’s evidence of the practice elsewhere.

Further, any investigation into whether or not UCMC is properly carrying out its mission and taking care of the necessary number of uninsured patients does nothing to solve our problem of millions of uninsured Americans and their poor access to necessary health care.

Sad Story at Tampa General

Sad story.

The problem, which is not mentioned in the article, stems from a nationwide lack of psychiatric hospital beds (pdf).  Deinstitutionalization was a terrifically humanistic improvement.  But it also significantly reduced psychiatric beds—a problem that has manifested into patients sleeping in the hallways or spending days in the emergency department (quite possibly on a gurney in the hallway as well).

As you may have guessed, psychiatric services are not well reimbursed, which contributes to the problem as well.  Raising nurse salaries, as the lawyer in the article suggests, goes against common business sense. It becomes quite difficult for hospitals to offer services on which they don’t at least break even.

This would helpHere is an explanation.

But our entire system still boils down to a misaligned system with improper incentives for providing the appropriate care for each patient.  Until we change that, stories like the one at Tampa General will persist.

Our Future: Moving Back Home?

Give or take a few years, the Millennial generation is roughly composed of those born between 1980-2000.  We number over 80 million (yes, that’s more than the number of Baby Boomers).

The eldest of this generation are starting to become parents.  Parents of Millennials are nearing retirement.

Explore this: in 15 years, the oldest Millennials will turn 43.  If they had children at 30, their oldest will turn 13.  The parents of those Millennials will largely be retired.

What’s the big deal?

From The Wall Street Journal’s Real Time Economics blog:

The study, by the McKinsey Global Institute, the think-tank arm of the consultants McKinsey and Co., carefully examined the saving behavior of various generations. The “silent” generation, the 52 million Americans born from 1925 to 1944, followed the classic pattern closely, with their household savings rate rising from below 15% in their early 20s to about 30% in their late 40s. But that pattern is almost absent for early boomers, those born 1945 to 1954; their saving rate tops out about 20%; and it’s completely absent for late boomers, those born 1955 to 1964, whose saving rate so far has remained stuck at around 10%.

Combine that with this troubling story from LifeWire via CNN:

When Stephen Leach gave up his Rockaway, New Jersey, condo at age 48 to move back in with Mom and Dad, it was out of need — his parents’, not his.

With his father suffering the ravages of Alzheimer’s disease and his mother struggling to remain in the large Randolph, New Jersey, home in which they raised five children, Leach stepped in a year ago to stabilize matters.

[snip]

Such arrangements are becoming more prevalent as the population ages. An estimated 10 million American adults need help with daily activities, and family members are responsible for 80 percent of such caregiving, according to the AARP.

If the people who supposedly saved enough are having trouble paying for health care in retirement, what lies in store for the Baby Boomers who most assuredly have not?  What are the implications for their Millennial children who may incur the burden of taking care of both their parents and children simultaneously?

Expensive health care has ramifications (see above) far outside its sheer cost.  But money has the most prescient impact.  Our health care spending becomes more difficult to sustain every day.  It is expected (pdf) that there will be 2.9 workers for every Medicare beneficiary by 2020, down from 3.9 in 2003.

A sustainable health care future is desirable for all.  Eighty (plus) million Millennials will think along the same line.  The last thing we need is a parents vs. children struggle for government dollars.  Expensive health care could ignite just such a fight.