One in eight workers in the U.S. work in health care

The Wall Street Journal had a story yesterday on how the recession is hitting health care.  In a departure from the norm during recessionary periods: some health care organizations are struggling.

Growth possibilities in the industry remain high; but, the (new) value conscious customer/consumer/patient will have a flattening effect on that growth.

Interesting; from this:

More than 16 million people — one in eight workers on U.S. payrolls — work in health care today, up from just 1% of the work force 50 years ago.

Wow! To this:

She [Kim King] and her ex-husband, a corrections officer, “used to joke that we had the most secure jobs out there, because people always need health care and prisons. It’s not true anymore,” she says. “I’ve never seen it so bad. It’s the one thing you would think wouldn’t be affected by the recession.”

To this:

“It’s a long-term shift reflecting changes in technology and what consumers want,” says Robert Fogel, a Nobel laureate and professor at the University of Chicago’s Booth School of Business. “Health care is the growth industry of the 21st century.”

Key to health care sustainability: no growth?

This is heretical health care thinking: what if the health care we provided today was enough (if tomorrow is a better day, we can roll with that)?  Enough in the sense that modern medicine has advanced to the point that any additional value created by continued medical research is not worth its financial cost.

The Good Blog quotes MIT Sloan School of Management professor emeritus Jay Forrester.  He says that the future business is a successful no-growth business:

“I think one of the biggest management problems is going to be to understand how to manage a successful non-growing company—and how to get out of the frame of mind that success is measured only by growth. … It’s very common to say, “If you stagnate, if you don’t grow, you will fail.” Well, that’s possible if you don’t maintain a system with proper management policies. You’ve still got to have some way to maintain vitality, to maintain some product progress, but to do it within a fixed demand on the environment. I don’t think I’ve heard of that being taught in management schools.”

Good’s Andrew Price writes:

Indeed. The idea of a no-growth business doesn’t seem to get discussed much anywhere yet. It’s great when companies buy carbon offsets or incorporate post-consumer recycled content into their products—every little bit helps—but we generally ignore the fact that there’s something inherently unsustainable about any business that has to get bigger to stay alive.

Realistically, the United States’ annual health care spend is unsustainable.  So when the dollars run out for advancing health care (assuming they do) will we accept what we have as the be-all end-all?

There may not be a choice.

Here’s the complete interview with Forrester.

Theater expansion and (its relation to) hospitals

While doing some Sunday reading (finals are over!) to avoid digging my car out of the 20.4 inches of snow we received in Columbus, I came across an interesting article in the New York Times on regional theater expansion.

Expansion has been on my mind lately. Evidently it’s been on theater people’s minds, too. “In recent years many of the 75 companies that form the League of Resident Theaters have looked at their aging or unaesthetic homes and joined what amounts to a nonprofit theatrical building boom. Since 2000 they and other institutions coast to coast have initiated dozens of construction projects whose combined tab is approaching $1 billion.”

Here’s the kicker, though: “What’s less evident is what it really means to operate them once they’re built.” Operating budgets doubled or nearly doubled for the new/expanded theaters. “But donors who have put their names on the cloakroom or water fountain may be tapped out when it comes time for the boring old annual fund. And annual funds are distressingly annual.”

But it’s lurch, and when one is in a lurch, one needs to find a solution.

But the companies are stuck in an economic bind. Reasonably enough, directors want the opportunity to stretch their imaginations with the latest technology, performers want dignified work conditions, and audiences want seats whose springs don’t threaten to give them tetanus. If the theaters don’t address these issues, they will stay small. If they stay small, they have to raise their prices; if they raise their prices, they risk losing new audiences; if they lose new audiences, they don’t have a future.

Change some words and all of the sudden it’s applicable:

But the hospitals are stuck in an economic bind. Reasonably enough, boards/administrators want the opportunity to stretch their imaginations with the latest technology, providers want dignified work conditions, and patients want care whose delivery components don’t threaten to give them tetanus. If the hospitals don’t address these issues, they will stay small. If they stay small, they have to raise their prices; if they raise their prices, they risk losing new patients (and old alike!); if they lose new patients, they don’t have a future.

Raising prices is easy to do.  Raising reimbursement levels is the problem and is highly unlikely in the current environment.  So what does everyone do to compensate? Increases utilization. What does increased utilization do? Moves us from spending a lot on health care to a lot more. Expansion and growth are part of business. All I’m advocating for is a little foresight.