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10 Events That Could Change Healthcare

HealthLeaders Media, September 10, 2008
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"Interesting question, and one we've been considering in our own long-range financial planning in the face of a deteriorating economy," says King. Interestingly, should a big bump like that occur, some hospitals would initially see a positive effect, says King, but long-term the problem would really eat into revenues.

"What we have found in earlier economic downturns is at least twofold: If people lose their jobs, some will consider the semi-elective procedures they've been putting off and will schedule them while they still have their COBRA coverage," he says. "That results in a bump up in patient volumes for our hospitals and physicians. Of course, as the economic decline continues, COBRA coverage lapses and the state feels the crunch of declining tax revenues. Both factors lead to declining hospital and physician office volumes. Academic medical centers tend to serve a disproportionately high percentage of the uninsured and Medicaid population, so they feel the eventual impact disproportionately hard."

So what if we did have 75 million uninsured?

"People who want coverage but who can't buy it can't get on public coverage-then we have a real public health crisis," Herrick admits.

But such an increase would put pressure on hospitals in some good ways, Herrick argues. "Transparent pricing would be a good result of this pressure. Hospitals that didn't do that would find themselves with higher bad debt write-offs. Firms that have price transparency are more likely to get paid versus firms that charge prices that are several times larger than what they're paid by Medicare."

Still, the pressure to enact some sort of government intervention would be extremely high in such a situation, regardless of the reasons why 75 million people would be uninsured. Says Baton Rouge (LA) General Hospital CFO Dionne Viator, "no health system in the world can absorb uninsured care without accompanying reimbursement at a reasonable level."

Philip Betbeze

What if Surgery Becomes an International Commodity?

Sure, the typical American might prefer to have surgery at a hospital close to home. But remember when Americans preferred cars built in Detroit? The good news for U.S. hospitals is that leading destinations for medical travelers know they can't be all things to consumers. The bad news is that they're perfecting the art of select elective surgeries that have some of the best margins. And these global hospitals in places like Singapore, Bangkok, and India do them in high volumes with quality outcomes and amenities that rival American facilities. They are truly commoditizing elective procedures like joint replacements, hip resurfacing, and spine and heart surgeries that appeal to aging baby boomers.

How big is this? Recent studies say U.S. hospitals are already losing billions from consumer outmigration, and the trend will gain steam over the next 10 years. If globalization affects these elective surgeries the way it has commodities outside of healthcare, you can expect some major changes to the industry. Just like other commodity businesses, the U.S. market will see large providers continue to consolidate in an effort to compete on price and quality with cross-border rivals. With an increased outmigration of patients, many community hospitals will have to shed these elective surgeries entirely. Smaller hospitals that try to compete will not only experience a decrease in volumes for these procedures, but they will find it increasingly hard to recruit needed subspecialists. In short, providers will feel some financial pain-but perhaps that's just the motivation the industry needs to finally control healthcare costs.

Rick Johnson

What if We Find a Bug Worse than MRSA?

Superbugs constantly morph as we throw different antibiotics at them, says Marcia Patrick, RN, MSN, director of infection prevention and control for MultiCare Health System in Tacoma, WA. That's why it's "very likely" that someday we'll fight a bug worse than methicillin-resistant Staphylococcus aureus, or MRSA.

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