More-efficient model needed for hospitals’ survival

Guest Column: Ted Almon
I know from many years of volunteer and fundraising work that people in our communities care deeply about their local hospitals. Businesses too tend to recognize the hospitals’ critical role in providing a safe environment for the workforce and are usually generous supporters. The hospitals reciprocate by stimulating the local economy as large employers and consumers of a wide variety of goods and services. During our current recession, the hospital segment has been nearly alone in expanding its work force here in the state. More

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OPINION

More-efficient model needed for hospitals’ survival

Guest Column: Ted Almon
Posted 11/28/11

I know from many years of volunteer and fundraising work that people in our communities care deeply about their local hospitals. Businesses too tend to recognize the hospitals’ critical role in providing a safe environment for the workforce and are usually generous supporters. The hospitals reciprocate by stimulating the local economy as large employers and consumers of a wide variety of goods and services. During our current recession, the hospital segment has been nearly alone in expanding its work force here in the state.

Most local hospitals are ingrained in the fabric of their communities in a way that transcends their medical mission. The era of reform which has now begun will cause considerable change in this venerable relationship and those of us who care should be aware of all the consequences.

Our role is not merely to resist reform, indeed it is necessary, but to guide it in enlightened ways that preserve the very nature of this essential service while making it economically sustainable.

It is now apparent the “supercommittee” appointed by Congress to reduce our national deficit will not reach a consensus solution. Among cuts they were considering were reductions in payments to hospitals in Rhode Island that could total more than $600 million in the coming decade according to an analysis by the Hospital Association of Rhode Island. Their failure now raises the possibility of automatic cuts of about 2 percent in program payments. If implemented, even this scenario would devastate the network of acute care providers we have come to know. Most are currently operating at a deficit, and several have more severe fiscal instability.

Optimistic businesspeople may be accustomed to such market disruptions and consider them a bitter but necessary correction of a business model that has become bloated over time. That would be true of more commercial endeavors, but the consequences of such a disorderly realignment of the hospital network could have very serious patient safety and quality implications we should consider.

Failing businesses are often challenged to maintain product quality in the face of insufficient revenue. I don’t think any of us would feel comfortable with a loved one as a critically ill patient in a bankrupt hospital. The alternative is that we must plan or engineer a more orderly transition from the present model to a more-efficient network we can afford.

In the past few years our state has twice legislated the establishment of a comprehensive health-planning body, most recently as part of the Insurance Exchange Executive Order. Serious follow through on the structure, authority and operation of this body is critical as the overall health care system evolves from the treatment of illness to managing the health status of the population.

The truth is our hospitals could operate much more efficiently. The free-market, competitive model in which they have operated for many years now could be streamlined considerably by collaboration among the now competing facilities.

Health care reformers have for years advocated a business model called Centers of Excellence in which redundant, expensive technology and programs are eliminated, common support services are shared, and patients are directed to the facilities best suited to deal with their individual condition.

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