More on Money in Healthcare
Dr. Elizabeth Rosenthal has written an op-ed piece in The New York Times pointing out hospitals are a major contributor to health care price inflation. She notes insurance companies and pharmaceutical companies have been receiving public criticism for their profits at a time of spiraling costs, but hospitals generally have not.
“Every senator, virtually every congressman and the mayor of every large city has a powerful hospital system in his or her district. And those hospitals are as politically untouchable as soybean growers in Iowa or oil producers in Texas.
As hospitals and hospital systems have consolidated, they have become the biggest employers in numerous cities and states. They have replaced manufacturing as the hometown industry in a number of rust-belt cities, including Cleveland and Pittsburgh…
Beyond that, hospitals are often beloved by constituents. It’s easy to get voters riled up about a drug maker in Silicon Valley or an insurer in Hartford. It’s much riskier to try to direct their venom at the place where their children were born; that employed their parents as nurses, doctors, and orderlies; that sponsored local Little League teams; that was associated with their Catholic Church.”
She pointed out hospitals, particularly those that are “non-profit,” have a real incentive to hide the size of their operating margins. As a result, hospitals often over-spend on infrastructure and poor management decisions. Given the political realities of money in election and re-election efforts, she is not optimistic any changes will occur soon, despite hospitals accounting for 44% of private healthcare spending presently.
The NEJM Catalyst website recently reported a survey of leaders of those health care organizations, where 47% reported their groups were not effective at engaging their clinicians. Only 39% have a formal strategy to guide engagement efforts. But--
“There is a discrepancy in the survey results between how executives perceive their efforts in clinician engagement and how clinicians perceive them. For instance, far more executives (55%) than clinicians (26%) indicate their organization had a formal strategy for clinician engagement.”
When asked what organizations should be doing to improve engagement, 72% recommended improving clinical quality, 55% recommended improving patient satisfaction, and 51% recommended “improving clinician satisfaction.” 15% recommended reducing the cost of care. A high level survey like this, of course, does not give much insight into what those efforts might include. But consider current clinical reality, where much pressure is applied to physicians to make sure “proper” coding is done, “proper” documentation is in place to justify that coding and keeping length of stay down. To do all of this, of course, a non-clinical EMR must be used, because it is “certified” by the government for use. Note, clinicians aren’t routinely encouraged or rewarded for using the EMR to improve patient outcomes or care experiences.
As a group, physicians have largely ignored the “business” of healthcare, but that does not mean they are unobservant. They can see money being squandered on things that don’t contribute to taking care of patients at the same time “head count” is being reduced on wards and in clinics. (Note some of the comments quoted in the NEJM Catalyst article.)
They are also aware many top-level executives are paid more than top-level clinicians, and face fewer personal consequences for bad outcomes, malpractice lawsuits or night call burdens, for instance. They also see the insulated political position the hospital has means executives really need not pay too much attention to the cost of care. Sure, no one wants a penalty, but there is really no profit in trying to be “the best.” Certainly, concentrating time, attention, and resources on a few areas to become truly excellent, if it comes at the cost of revenue losses by foregoing service in other areas, won’t sell.
From the executive’s perspective, what matters is the business—that is what his/her Trustees expect. Of course, most Trustees have no background in healthcare—they are supposed to represent the community or the charitable organization. They are told hospitals don’t have pricing power relative to insurance companies unless they get big, and they must hold expenses down to stay solvent. But the trustees don’t have the ability to dig into operational issues. All they can do is hire and fire management. Certainly, what is going on from a clinical perspective is reflected only in the gripes they get as they go about their daily lives in the community. While the number of gripes may be useful, individual complaints are rarely actionable.
So, what, if anything, can be done? Disengagement of clinicians leads to poorer clinical outcomes regardless of how that is measured. Politicians are not going to attack the power structures that support their re-election. Maybe the only thing that can be done is for Boards of Trustees to insist on getting meaningful input form front-line clinicians. This must go beyond the usual “dashboards” and formal reports. They will also have to insist their clinical leaders are not “PINO’s,” which one CMO of my acquaintance calls those who are MBA’s first, MD’s second—“physicians in name only.” Perhaps most importantly, Trustees need to call their organizations back to their original purpose of providing the best healthcare possible to the community—not being the richest organization in town—and then find ways to make that happen. Will it happen? I am not holding my breath.
3 September 2019
 Rosenthal E. That Beloved Hospital? It’s Driving Up Health Care Costs. 1 Sep 2019. Accessed same day at https://www.nytimes.com/2019/09/01/opinion/hospital-spending.html.
 Swenson S, Chokshi DA. Leadership Survey: Why Clinicians are Not Engaged, and What Leaders Must Do About It. NEJM Catalyst, 8 August 2019. Accessed 14 August 2019 at https://catalyst.nejm.org/clinicians-not-engaged-clinician-engagement.html.
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