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Balancing more-profitable, less-profitable, and no-profit

Posted Jan 13 2010 3:15am

Marketplace did a story on ambulatory surgery centers.  If you’re familiar to healthcare you have heard it all before.  Moving care to the most cost-efficient locale is the right thing to do.

But what’s frustrating is what this reality highlights about the system.  Hospitals, generally, aren’t cool with physician-owned surgery centers because they tend to take away the more profitable cases away from the hospital. See, the way hospitals are paid for what they do makes little sense.  Hospitals need the less complicated, more-profitable care to subsidize the more complicated, less-profitable care.

The problem with all this is that less-complicated care should be taking place in less-costly environments.  The fact that there’s a struggle between physician-owned ASCs and hospitals shouldn’t need to be (the physician-owned ASC vs the hospital-owned ASC is a different matter, though a more truly competitive one).  But since hospital finances depend completely upon getting the right balance of more-profitable services over less-profitable services while still offering money-losing services that are needed by the community, you can see where the issues develop.

No real point here, just one of those “this is stupid” scenarios that are all too familiar in healthcare.

A couple more relevant, unrelated thoughts:

I love how the actual scene of care is a secondary thought in this statement about infrastructure (health reform overload, maybe?):

There’s a whole infrastructure that comes along with health care in this country. Not just the billing and the bureaucracy, but the actual places you go to get care.

This statement from the anesthesiologist who runs the ASC mentioned in the story is actually scary:

We haven’t actually done the whole budget for next year yet, but we’re probably going to anticipate 15-20 percent margin next year.

Oh you know, just a 15-20 percent margin next year. Wow. That place doesn’t require management of any fashion. That’s a lot of profit. Since that’s a lot of profit and there’s a lot of government involvement in healthcare, I’d advise you to get while the getting’s good.  But not too much, because they’ll get ya.

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