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Healthcare needs improved delivery, not more hospitals

Posted Jan 11 2012 1:32pm

by Kent Bottles

Two recent articles tell me that some physicians and hospital leaders have not been paying close enough attention. When the rules change, you need to read the new rules and adjust your vision and strategies and tactics.

In my experience, successful leaders do four things:

  1. They conduct an environmental assessment of their industry and create a vision that can inspire themselves and the people who work for them.
  2. They translate that compelling vision into strategies and tactics.
  3. They assign those strategies and tactics to the right people.
  4. They hold those people accountable for results measured by metrics agreed upon beforehand.

An article in the Pittsburgh Tribune describes how hospital leaders in North Carolina, Illinois and California are busy building new hospitals. While traditionally hospital administrators have liked to build new facilities, some healthcare industry thought leaders are taking a look at the changing healthcare environment and asking if such expansion makes sense.

Two years after opening in Elgin, Ill., Sherman Hospital has a gorgeous new physical plant and many empty beds because of overcapacity. Meanwhile, critics are blasting a hospital system plans to build a $30 million medical facility in Fletcher, N.C. because it will duplicate services that are readily available in nearby towns.

The critics note that the United States spends too much money on healthcare compared to other countries; American employers who provide healthcare insurance to their employees are struggling to compete in a global marketplace because of the ever-increasing cost of medical care. The Patient Protection and Affordable Care Act (PPACA) contains many pilot projects aimed at transitioning from fee-for-service to global payments, and there will be less money in the future for hospitals and physicians because America simply cannot afford to spend as much money on healthcare as it does now.

Would it make more sense to invest the money being spent on building new facilities in a different way? Perhaps that investment should be made in information technology, improving transitions of care, enhancing the teamwork and communication of physicians and allied health professionals, improving the quality of the care delivered, making sure everyone gets prevention measures, getting the public to change unhealthy lifestyles, and reporting and fixing the 130,000 adverse events that affect Medicare beneficiaries every month.

We don't need new hospitals; we need to change the way we deliver care so that accountable care organizations (ACO) have the necessary competencies to take better care of Americans.

Physicians, like hospital administrators, have not always noticed that the healthcare environment has changed. A recent article titled "Doctors Going Broke" documented that many physicians are struggling financially because of changes in insurance, business acumen, the economy and new payment methods that tie reimbursement to clinical quality.

A Philadelphia private practice cardiologist states that 35 percent to 40 percent cuts in Medicare reimbursement for stress tests and echocardiograms led to a 9 percent decrease in total 2011 revenue compared to 2010. A Southern California oncologist personally owes drug companies more than $1 million for cancer chemotherapy that his patients need, but he cannot get reimbursed by third party payers like he had before. In 2005, Medicare changed the reimbursement guidelines for cancer drugs. The reader reaction to this article ranges far and reflects the complexity of the problem.

I conclude that the status quo of American healthcare delivery remains unsustainable and too expensive. Attempts to fix the problem will create unintended consequences that will hurt patients and will need to be resolved as soon as we discover them. Physicians and hospital leaders cannot rely on old solutions in a rapidly changing healthcare environment. You cannot lead unless you have read and understood the PPACA, the final rules on ACOs and bundled payments, and the ever-changing proposals to decrease the cost and increase the quality of Medicare.

I never promised you this transformation of American healthcare to decrease per-capita costs and increase quality was going to be easy.

Dr. Kent Bottles is a Senior Fellow at the Thomas Jefferson University School of Population Health and Chief Medical Officer at Verilogue/ He is frequently called upon to give keynotes and write articles about healthcare reform, the future of medicine, and disruptive technologies.

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