MRSA Progress Brings Hope for Hospitals’ Ability to Adapt

No shortage of commentators like myself are predicting that the business of healthcare is about to get a lot more cutthroat. To hear some of them tell it, the unceasing double-digit inflation that has plagued healthcare for years will eventually lead to a race to the bottom, whereby only the most hardy and lean organizations will survive, putting everyone's healthcare at risk.

That doomsday scenario is indeed a possibility as we look far into the future of healthcare delivery. In fact, it's a widespread belief that many hospitals and health systems won't be able to make their necessary margins on essentially Medicare rates of reimbursement as healthcare reform takes hold, and they will close. I got more than a couple of emails from readers on my recent column about standalone hospitals, where I suggested few will actually close in the coming years. My correspondents vehemently disagreed, in effect saying, this time it's different.

Maybe it is different this time. That there is waste in the system, there can be no doubt. That we can't afford such steep annual hikes in healthcare costs is unquestioned. That we can't afford to continue to treat people in an uncoordinated fashion makes perfect sense. But in the race to get to that point, will so many hospitals get it wrong enough to actually cease operations? Is it really that bleak?

I don't think so, and here's one reason why. When faced with an ultimatum, hospital leadership, as leadership in any other business does, responds. Let's look at a big win this week in a story written by my colleague Cheryl Clark. In it, she discusses a study conducted by the Journal of the American Medical Association that shows hospitals have made huge strides against hospital-acquired infections caused by hospital-onset methicillin-resistant staphylococcus aureus, better known as MRSA.

MRSA is the scourge of hospital ORs around the country. Contracting it results in an often-crippling infection, usually on vulnerable people who have undergone an unrelated surgical procedure. And preventing its transmission is deceptively simple. Deceptive, because all it takes to prevent most cases is proper sterilization of equipment, and importantly, the hands of the people performing the procedure.

Anyway, hospitals have been able to decrease the incidence of the hospital-acquired infections caused by this bug by 9.4% a year from 2005 to 2008, the latest period for which data is available. By any measure, that's significant.

This reduction in infection rates hasn't happened by accident—or because the infections have gotten any less virulent. It happened because hospitals and their leaders, on both the physician and executive side, made it a priority. In some ways, the stick, rather than the carrot, has pushed this improvement.

Certainly, hospitals and physicians don't wish to do patients harm, but in the miasma of responsibilities involved in caring for patients, it's often easy to ignore something that doesn't have revenue attached to it. That's why handwashing and other sterilization procedures for too long were routinely ignored.

MRSA infections can be deadly. But more importantly, they're extremely expensive, adding days or longer to hospital stays for people who should have been able to go home much sooner. They also add costly drugs and much unnecessary pain and suffering to the equation. But perhaps most importantly they add cost—costs for which hospitals are increasingly on the hook.

Payers, including Medicare, have discovered that hitting healthcare organizations in the pocketbook is a sure way to get their attention. That the decrease came at the same time Medicare was implementing payment punishment when so-called "never events" happened, is probably no coincidence.

In the same way, perhaps a better focus on cost will further the goals of cheaper and safer care. No one can yet say for sure what healthcare reform will do to reimbursement, but most senior leaders I speak to think it will make hospitals financially weaker, because although more people will be covered by insurance, reimbursement per patient will actually drop, for reasons that are too complex to get into here.

Perhaps that will be a catalyst for efficiency in healthcare—a smaller pot of money. Hospitals and other health providers will adapt. It won't be pretty. Sure, some organizations won't be able to compete,