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Back to Basics

Jim Molpus, for HealthLeaders Magazine, February 3, 2009
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Curbs on realignment and consolidation are still in place, however, as regulators still cast great scrutiny on consolidation that would seem anticompetitive. Consolidation that is done for the long-term survival of a community healthcare pillar is one thing, but "if it is done to capitalize on weakness in that market, obviously there may be some pushback," Umbdenstock says.

Those hospitals that see their capital cut off may not have any choice, Bigalke says. "If the money is not there, they will have to find someone who will collaborate with them and provide the capital, or they will not be able to survive. When you are in that position, if the reasons for it are straightforward, then the regulators are going to have to make some tough decisions."

First in, last out
Healthcare has never been the industry that comes out of a recession first. "Hospitals have typically lagged behind as much as 12-18 months," Umbdenstock says.

Maybe the question is not as much about when the downturn will end, but what kind of healthcare industry will survive, says Holman. "I don't believe healthcare can go back to where we were or that we can sit back and 'wait it out.' Frankly, Americans deserve better, more efficient healthcare. The economy is a mandate to make change."

Some change may already be coming. Some hospitals are starting to rethink how they view the upstream healthcare needs of the at-risk population who may end up in the ER, Umbdenstock says.

The future of Henry Ford Health System may seem a bit brighter than that of its community, but Schlichting says in a time like this, there is one certainty. "The only thing we can control is our performance," she says. "If you focus on all the uncertainty, then you are very distracted and you can lose your business because your quality is not as good."


Jim Molpus is editor-in-chief of HealthLeaders Media. He can be reached at jmolpus@healthleadersmedia.com.


HOW LONG?

The two longest sharp recessions on record lasted 16 months, according to the National Bureau of Economic Research. That same bureau says the current recession actually began in December 2007. Unfortunately there are few if any signs that the current downturn will turn around in the first four months of 2009.

HealthLeaders contacted some leading hospital system chief executive officers for their view of how long they expect to manage through one of the worst economic downturns in U.S. history.

"We've discussed that we expect the downturn to last at least through 2009. We are prepared for 2009 and are working on contingency plans if it lasts into 2010."Stephen Williams, CEO, Norton Healthcare, Louisville, KY

"We expect the downturn to last through at least the second quarter of 2009 and maybe last through all four quarters of 2009."Dan Wolterman, CEO, Memorial Hermann Healthcare System, Houston

"I've told our leadership that I believe Warren Buffett is right: This severe recession will be 'deep and wide.' I expect the worst is in front of us—possibly the first two quarters of 2009 and a slow/gradual recovery that will last two years."Brian Keeley, CEO, Baptist Health South Florida, Miami

Jim Molpus

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