Tea Leaves

Jim Molpus, for HealthLeaders Magazine , March 12, 2008
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Some thinkers would have us believe that we spend too much time looking into the state of current events and using those events to extrapolate what the future holds. Futurists, however, point to the industry tea leaves and warn us that healthcare is facing an unprecedented crisis.

Chances are that the NCAA tournament bracket on your desk will have more correct guesses than those who are trying to offer useful guidance on the long-term future of healthcare. Perhaps we are so accustomed to turning down the volume of the industry pundits that we are deaf to the sound when actual boulders drop right next to our feet.

Hopefully people in any industry have learned by now to pay close attention when Wal-Mart issues any news in your sector. You do not want to be the healthcare version of the grocery industry guy who said 15 years ago, "Wal-Mart? Who'd go to Wal-Mart to get groceries?" Wal-Mart announced last month that it will open its line of branded clinics--creatively tabbed "The Clinic at Wal-Mart"--in 200 stores. These clinics will be co-branded with local hospital systems. Retail clinics in big box have been around for a couple of years, but until this point have followed a fairly predictable model. When the big one from Bentonville, AR, makes a major play at 200 stores, the message that I got was clear: more to come. It would be too dangerous to fall back on the faint hope that the world's biggest retailer will be content to treat scrapes and sniffles and leave the real dollars in healthcare alone. This is not a prediction. It's a sign.

Another sign that should require no anesthetic is President Bush's proposed $208 billion cut to Medicare and Medicaid over the next five years. Every healthcare association and organization with a lobbyist and a Web site has seemingly joined the chorus of vehement opposition to a budget that has very little chance of passage. But beyond the short-term battle over keeping as big a piece of the pie as possible looms the other question: If not this, then what? Congressional pressure may bend back the pain of such proposed cuts for now, but beyond that lies an unfunded Medicare liability of some $25 trillion over the next 75 years.

It is a dangerous misdirection to view these cuts as merely the last budget of a lame duck president. This is the first of many budgets to come that will make this one seem generous. Again, this is not a prediction. It's a sign.

Jim Molpus

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