Wednesday, December 04, 2013

Financial struggles for hospitals

---will continue in 2014 according to a recent Moody's Investors Service report. The report was linked by Danielle Scheurer over at The Hospitalist Leader. She wrote:

Moody’s Investors Service predicts the financial outlook for US not-for-profit hospitals will be no better in 2014 (and which has been negative since 2008). They expect hospitals will continue to see tight margins, as revenue will not keep up with expenses..
Overall, for hospitalists, this will have to translate into a continued and fierce focus on Value (Quality / Cost) for all of us, to maintain feasible operating margins within our hospitals..

Of course this goes back beyond 2008. Hospitals have struggled for decades and it just steadily gets worse. The biggest tsunami for hospitals happened in 1984 with the advent of DRGs. It's just been a gradual continuum of more and more intrusive regulation and financial challenges ever since. Obamacare, whatever ultimately becomes of it, will likely just be another phase of that continuum. It will be disruptive but probably not as disruptive as what we saw in 1984.

But people lose pieces of their memory. I recall sitting in a large conference room in 1983 or 84. The speaker, talking about the advent of DRGs, warned the audience: “Doctors, you are about to be held accountable for providing high quality health care efficiently and at a low cost.”

Fast forward to 1994. Despite the demise of the Clinton health care plan managed care had already adopted the model and was poised to advance like a steamroller. And there was another conference room, another speaker who said: “Doctors, you are about to be held accountable for providing high quality health care efficiently and at a low cost.”

Fast forward to about a month ago in a conference room at the Hyatt, at UCSF's hospital medicine course. Bob Wachter, course director, stood up and spoke those same words. As if it was something new.

Reports like this remind me to try and be a better steward of medical resources. The unfortunate consequence for hospitalists has been the redefinition of core skills from clinical to business.


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