Non-profit Hospitals - Quit Your Whining!!!

There’s a certain medical group that for the longest time preached the beauty of the free market. As their revenue streams grew, they used their cash to expand their reach into our fine city. Their main building expanded, both up and around. Building after building was erected, which some conspiracy nuts believe is the reason why that part of town now has a flooding problem.
They also used their cash to expand throughout the rest of the city and state. Almost every medical clinic was purchased by this so-called non-profit, including one that was physically attached to their biggest competitor. Many of these conquests were billed as “specialty clinics”, dedicated to just one or two specific types of medical care.
Despite all of these acquisitions, this company still had extra cash. I guess five dollar band aids results in a pretty high profit margin. What did they do with this extra cash? Sponsorships. There are few scoreboards or public buildings that don’t feature a logo from these fine folks.
A few years ago, however, a few men and women actually broke away from this company and started their own business. Having spent so many years with this company, they also believed in the free market system. They built their own facility, and specialized in one possibly highly profitable aspect of their former employer.
Suddenly, the free market system isn’t such a great idea. How dare these people try to better themselves financially at the expense of their company’s bottom line!
In the real world, if competition arises you protect yourselves in many different ways. You offer better service, or you advertise the advantages of the services you provide. Or you could strengthen other areas of your company. Maybe, and I know this is completely unheard of in the medical field, you offer a price advantage.
Not these guys. They contacted their buddies in the government. Along with other medical companies in a similar situation, in 2003 they convinced Congress to adopt an 18-month moratorium on specialty hospital start-ups and expansion. When that ban ended recently, the feds opted not to make any Medicare agreements with new specialty hospitals, which essentially lengthened this moratorium.
But this is not enough for these people. They want a new law passed that would basically stop existing specialty hospitals from any expansion of services, beds, and rooms or the admittance of any new doctors. In other words, it’s okay for them to continue to buy out entire neighborhoods to expand the services they provide but not anybody else.
They’re currently expanding their propaganda war to the business community. Just this past week, my family’s business received a five-page packet of garbage bemoaning their self-created disadvantage. A lot of space was given to allegations of abuse due to physician self-referral. On first glance, this does appear to be a legitimate complaint. But with truly independent clinics now a thing of the past, when was the last time that any hospital-owned facility referred somebody to a facility not under the same ownership group? Isn’t there a similar potential for loyal employees of these so-called non-profits to order unnecessary tests and procedures?
Currently, there’s no proof that any of these specialty hospitals have acted in an improper manner. Every company in any industry has a potential for misconduct; that alone is not enough reason for their competitors to limit their ability to do business. When it comes to health care, there is currently enough documentation to investigate any allegations. Lower profit margins are not enough cause to rewrite the rules in one side’s favor.


Anonymous said…
I see you around town from time to time and as I have mentioned to you in the past, I truly enjoy your musical taste. But on this one my friend, you are way off base. Quite simply, you do not have the facts. Or to put it more accurately, you don't understand the facts.

When a physician makes a referral to a facility, and a procedure is performed, the performing surgeon makes a fee, as does the hospital. Regardless of where it is performed (specialty vs community)the fee is basically prenegotiated and fixed. I.E.: both the hospital and the surgeon know going into the procedure what their reimbursement will be.

However, when a physician refers a patient to a facility in which they are a partial owner, then they do benefit beyond typical reimbursement. Call it profit sharing, increase in owners equity, disbursement of capital or Christmas bonuses, the bottom line is if they are an owner, they can profit from a referral to their own hospital.

Check the record - no one is proving that standard of care is increased at a specialty hospital or decreasing at community hospitals. The arguement is about a conflict of interest.

For example: If you were the gatekeeper to the hungry masses of Sioux Falls, wouldn't you direct them to your own facilities? The answer is yes. And while you may be jumping up and down shouting "No shit!" that is the point exactly. Now what if these hungry masses said "Well, I just want a cup of coffee and sit for awhile?" "Or how about 1 thing off of the value menu?" Well those aren't really profitable customers are they? And hell they can get coffee anywhere, so why not go down the street? Or at least why don't some of them go down the street, i.e.: share the burden.

As to your comment regarding the $5 band aid, get real! We have all seen a hospital bill in our lifetime. Have you ever seen a labor cost for: the admitting nurse, the floor nurse, recovery nurse, the anesthesiologist, the scrub techs, the transporter, the dietician, the night nurse? Of course not! Just as I don't see a labor cost when I walk into your restaraunts, I am pretty damn sure of at least 2 things: 1.) a 16-ounce Diet Pepsi doesn't cost you $.99 and 2.) you do pay your people.

I admire your musical tastes Scott, but to rant about this topic without an understanding of the facts, is irresponsible.
Scott said…
I need to get a subpoena and search the parking lot of Sioux Valley for any car who has CD's with similar tastes as mine. There can't be more than one or two people.

Having said that, I guess we have to agree to disagree. But there's nothing better than a healthy debate. In a perfect world, the situation you describe would something to be avoided. But, unfortunately, as the big corporations get bigger and bigger wenow live in a world where conflicts of interest are all over the place, starting at the top with many in Bush's cabinet.

Sure, the physician in a private facility has the potential to make money outside of his fees as an "owner". Is there any evidence that anybody at the facility in question is ordering unnecessary tests or procedures to buff their bottom line? I haven't heard any.

I just don't believe there's any difference than what routinely goes on in the satellite facilities that are affiliated with any of the two biggies in town. Or the reported conflicts that occur when the pharmaceutical companies give financial incentives to doctors or facilities for specific drugs. Maybe that doesn't happen as often as reported.

As for the band-aid line, it was nothing more than sarcasm included to make Cade (and hopefully the listeners) laugh on the air. But at least in the drink comparison you raise, that drink price is similar to what it costs at any store or restaurant. Band-aids don't cost five bucks at the store.

I'll admit here that I don't know that much about the situation. I do believe that when SV took this fight public, particularly the mass mailing, they don't understand the public's perception of SV. They're not thought of as a benevolent non-profit that cares more about people than money. Most people that I deal with feel that they're no different than the other big corporations in town, and this fight seems petty and self-serving.

I hope our differences in opinion on this single issue don't leave a negative impact on your thoughts of my music taste or as a person. Please feel free to educate me (beyond the official company line) as to why I'm wrong.

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