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Retail Clinics Versus Public Hospitals

Posted Aug 25 2008 2:52pm
This morning, two stories caught my eye. KevinMD is pointing to another article on Grady's plight in Atlanta ; another public hospital struggling to survive .

The other story was one of several reports on CVS' MinuteClinics being cleared to operate in Massachusetts: WSJ , David Harlow's Health Blawg , White Coat Notes at the Boston Globe, and Paul Levy at Running a hospital .

So hospitals are dying while corporate money mills with very little value-added are thriving. This evening, I spotted another post , reporting that 6 - 8 storefront, limited-service, retail clinics are going to open per day in 2008, over and above the 1000 already in existence.

There is a greater need in one area, but a greater profit to be had in another. Public hospitals fail while retail clinics grow.

I am a great believer in free markets, but fair markets rarely occur naturally. The current conditions are, in fact the result of regulations that provide perverse market incentives. Half the practice of medicine involves NOT PRESCRIBING MEDICATION!!!!

(Sorry, I'm yelling!)

Now, retail giants like CVS, have succeeded in developing vertically integrated style operations in which they control everything from the distribution channel to the provider's incentive. By most informed people's standard, quality is not defined by the highest possible prescriptions per encounter, but that is the natural incentive when a pharmacy chain controls the providers. Bonuses will be paid and employment decisions will be made according to the provider's ability to generate prescriptions.

And a public health authority voted for this? In Boston, with an incredible network of publicly controlled, not-for-profit community health centers? That makes absolutely no sense and without an adequate explanation of their logic, somebody please look for corruption or corporate threats on the face of it . As David Harlow points out , the diversion of resources will ultimately be damaging to the population's health. People need medical homes, not McDocs and McPA's. Nobody is coming to work for me, given that all I have to offer is a more difficult job and lower remuneration.

We must compete on a level playing field. The question is who is getting the more difficult patients and not being adequately remunerated for it. Who is getting easy encounters and getting the dividend of the prescribing revenue?

I can see 50 healthy people with coughs and colds with a good nurse and someone to answer phones and I can do it in 4 hours. In the same amount of time, I can properly do two complete geriatric assessments. The reimbursement differential per encounter cannot possibly cover the differences in resources, so I can't afford to do them properly. I cannot allow my physicians to do complete assessments and so will encourage them to refer out. MinuteClinics didn't worry about pushing those patients to me because they do not provide the service. Will you, dear reader, require me to have a different moral standard than MinuteClinics?

If retail clinics can push certain patients to me, then I can push those patients to someone else.

Health care facility managers segment their markets and subtly poach the patients that represent the best profit margins. Why hire a nurse practitioner with pain management background? Those patients are time-consuming, frustrating and unprofitable. Rheumatologists sometimes deal with elderly patients and time-consuming multiple medical problems, frequently more than they can compensate for in procedural fees from joint injections. In fact, poor people are generally a good bet to represent losses, sometimes even with Medicaid.

In a city like Atlanta, hospitals and ER's adopt the view that the "county hospital's" job is to take "those" people off their more productive hands . Some public/county hospitals do not recognize that this is the kiss of death.

Public and county hospitals must be in a competitive mood in order to recognize that their existence is threatened. Despite not having lived in Atlanta for three years, I am convinced that a major portion of Grady's trouble stems from the mind-set that "they" will never let Grady go under (meaning the counties and the state would always bail Grady out, no matter how much trouble they got into.)

Being sheltered from competition is part of Grady's problem.

Here, in the Great American Desert, I am in a community with three hospitals; one is county-funded (and trying to expand based on a public appropriation), one is critical-access (therefore subsidized by enhanced Medicare and Medicaid payments) and a stand-alone for-profit. It is only the for-profit that is knocking everyone's socks off. The others are trying to protect or expand their federal or local subsidy, rather than competitively expanding product lines, improving service levels or quality-of-care.

So we have contradictory forces regarding competition. In the case of MinuteClinics, competition harms the public health. In the case of public and county hospitals, the lack of competition is at the root of the problem.

In a free market, public and county hospitals must realize that they have to compete for the same kinds of profitable patients that MinuteClinics is after. But MinuteClinics must not be permitted to get away with such an artificially limited scope of service, by which they effectively block access to complicated patients, leaving the costs for others to bear. And damn the consequences that the rest of us who will have an even greater trouble recruiting competent providers to do the slugging in the trenches where it counts.
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