Over the years, healthcare has proved to be remarkably resilient against multiple attempts to control a supposedly unsustainable growth in costs. I say supposedly because costs keep growing so fast, and little seems to affect that trajectory even as we approach spending 20% of our GDP on healthcare.
According to the Kaiser Family Foundation, we now spend 10 times the amount we spent on healthcare in 1980. And although the rate of growth has ebbed and flowed, costs have always outpaced the growth in national income over that time period, and show no signs of ever growing slower than or even at the same rate as GDP in the foreseeable future.
Trying to slow healthcare cost increases without limiting services is like squeezing on a balloon. Squeeze reimbursements down in one area, and another one soon pops up.
But the rate of healthcare cost increase nationwide is a macro problem. Your challenge is managing a hospital, health system, or large physician group practice. That means your job is to grow the business—and let's not quibble about whether your institution is doing so only to maximize profits.
Yes, for-profit health systems are seeking profit first, and nonprofit health systems provide valuable and unprofitable services to their communities, but on the balance, you and many of your colleagues are out of a job when you can't grow the business or meet a targeted margin.
A big story in the New York Times has recently caught the attention of healthcare decision makers. Though it raises troubling questions about whether or not the for-profit hospital chain HCA has boosted profits at the expense of patient safety and quality—namely in the areas of dialysis and heart procedures in Florida—at least one of the tactics mentioned in the story just seems to make good business sense.