Disappearing Hospitals - Imploding Under Reform
Pearl writes: Last week’s (Forbes) article discussed the “strategic inflections point” as that defining moment in any industry when the rules of the game begin to change. In the era of health care reform, hospitals across this country are now experiencing a time of transition.
Pearl writes: We can predict that the first hospital CEO who suggests closing down a cardiac surgical program will be fired on the spot. The doctors and local community will do everything in their power to stop it from happening.
Consolidating or closing entire hospitals will be even more painful. Regulators would likely intervene. Change will be resisted and delayed.
But, if there were fewer hospitals with higher volumes, quality would rise and the overall spend on hospital services would decrease. We should not underestimate how difficult this process will be or how long it may take. But once it is complete, patients will barely miss the old hospital down the street.
Here is more of Pearl's interesting Forbes article:
What first comes to mind when you hear the word “hospital”?Your reaction may depend on your past experiences. You may feel gratitude for the birth of a child or the treatment of acute appendicitis. You may feel sorrow, remembering a loved one who passed away on a hospital bed.
Regardless of our experiences, many of us assume the closer our hospital is to where we live, the safer and better off we are. But that assumption is wrong. Fewer hospitals with increased volumes would lead to higher quality of care and better clinical outcomes.
By the end of the 19th century, medical care was becoming too complex to be delivered in the home. As a result, care shifted to centralized facilities where patients benefited from the latest medical advancements and around-the-clock physician and nursing availability.
A century ago, traveling even moderate distances was incredibly slow and expensive compared to the cost of hospital care. Therefore, building a hospital in every town made sense. Hospitals became a source of great civic pride for community leaders who comprised the governing boards. And so the “community hospital” was born.
With the introduction of the publicly funded Medicare and Medicaid programs in 1966, the number of individuals with health insurance skyrocketed – as did the demand for inpatient services, as did hospital costs.
By the 1990s, high-margin procedures such as heart bypass surgery and total joint replacement were performed in (and advertised by) nearly every hospital. But the demand for inpatient services sharply declined in the 1990s with the introduction of managed care, the expansion of outpatient alternatives, and the mounting costs of a hospital stay. During that decade, some hospitals were forced to merge or shut down.
Since 2000, the number of acute-care hospitals has held steady at around 5,700. However, the push to limit utilization at these high-cost facilities continues while low-volume hospitals across the country are struggling to survive.
The reduction in their volume, revenue and margin threatens their independence and even their existence. Over the past decade, 16 percent of hospitals have consolidated by joining a health system. That trend is accelerating in the context of the Affordable Care Act, also known as Obamacare.
Labels: acute care, aging population, Dr. Robert Pearl, Forbes, health care reform, hospitals, Obamacre

