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What Drives Your Success? Maybe Not What You Think

Philip Betbeze, for HealthLeaders Media, August 17, 2012

But so what? Of course it takes money to invest in employing physicians, expanding your business footprint outside the traditional hospital-centric healthcare model, and in obtaining the most advanced clinical equipment and services.

And of course, in the largely market-based economy that has been commercial insurance rate negotiation, hospitals and health systems can't be faulted, barring any antitrust enforcement, from driving the hardest bargain they can from the private market.

Just don't get too used to being able to do that, Kaufman cautions. High commercial rates fund innovation, successful employment of a large group of physicians, development of a high-functioning clinically integrated network, and the ability to become nationally recognized for excellence.

But a rude awakening awaits when rate regulation and tiering become more prominent, as he expects.

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1 comments on "What Drives Your Success? Maybe Not What You Think"


Dr. Rob (8/21/2012 at 2:00 PM)
"That's why Kaufman says that if you aren't getting substantially higher commercial rates than your competitors right now, it's time to start thinking about a merger, or at the very least a precursor to a merger that helps your finances survive a big hit to reimbursements. All the higher current commercial rates buy you is some indeterminate amount of time." I do not follow the logic. You are recommending facilities to cost shift to HMO's, or until the Stae and Federal enrolled members bleed them dry. You are essentially adding another unfair burder on the working class and those who can afford healthcare coverage - essentially another "tax" to subsidize the care rendered in Federal/State programs? How will this sustain "quality healthcare for all"? It won't. IT would be more prudent to reduce the current services offered, or cost shift to the current enrolled members of Medicare and Medicaid? When the money runs out of these programs, further reductions will need to be realized, or further co-payments by these members will need to be implemented in the Federal/State programs. It is only a matter of time until this happens. Current levels of spending in Medicare and Medicaid are NOT sustainable. Current levels of reimbursement have never been close to actual costs. Members are receiving "Mercedes" care on "Model-T Ford" budgets.