HealthLeaders Media Finance - April 14, 2008 | Cross Purposes View as a Webpage | Subscribe for Free
Cross Purposes
Philip Betbeze, Senior Editor-Finance

Isn't it odd that an entity like a nonprofit hospital survives financially by keeping people in hospital beds while its stated goal is to keep people out of them? It's true. Check the mission statements of any number of nonprofit hospitals and you'll find various ways to say that the hospital's goal is to promote wellness and restore health. That's admirable, and in an ideal world it's what hospitals should be in the business of doing. In other words, they should be cutting their own financial throats. [Read More]

  April 14, 2008

Editor's Picks
Hospital capacity drives costs
The folks at Dartmouth are doing us all a favor with their breakdown of Medicare costs that comes out every two years. Now, if only policymakers would listen. The study has shown for years that spending for chronically ill patients in the last two to three years of life (when $1 out of every three is spent in Medicare) is as much as twice as expensive in some areas as others, while the quality of care those patients receive is no better. Why? Because in the most expensive areas, patients spent as much as twice as much time in the hospital as those in lower-cost areas. The key driver is that some markets, despite years of consolidation, are still overbedded (see story on New Jersey's problem below), and a variety of drivers causes those beds to be filled, often to no discernable benefit to the patient. [Read More]
New Jersey hospital reduction a cure, lawmakers told
I had a hospital CFO, of all people, tell me the other day that there are too many hospitals and that some should be allowed to fail. New Jersey's health commissioner apparently agrees. She told state lawmakers that a proposed 14% cut in state aid to hospitals would undoubtedly result in the closure of some financially weak hospitals but would improve the financial health of those that remain. Perhaps they're hoping to follow the lead of New York's Berger Commission, which recommended the state close 23 hospitals and seven nursing homes. [Read More]
Cheaper to let people get sick?
This study reminds me of the recent one from overseas that claimed it was cheaper in the long run to pay for health treatment for people who are fat or smoke because they die sooner. A similar study claims that economically, it's cheaper to let people get sick than to spend a lot of money on prevention. This story is worth reading if, for nothing else, the lead. I won't spoil it for you here, but go ahead and click on the link below. In related news, another study proves that common sense is dead. (Just kidding about that one, but don't be surprised if you see that study soon.) [Read More]
Efficiency is the cure
A new model for patient care at ThedaCare in Appleton, WI, is helping doctors and other caregivers to recognize and eliminate waste in patient care. Like some healthcare organizations over the past few years, ThedaCare is incorporating aspects of lean manufacturing to help ferret out wasteful procedures that don't add value. If only more hospitals would follow their lead. [Read More]
Medical errors cost U.S. billions
HealthGrades is doing the Institute for Healthcare Improvement's 100,000 lives wake-up call one better. How about 238,337 lives? That's how many people died from potentially preventable medical errors from 2004-2006, according to the fifth annual Patient Safety in America's Hospitals study. HealthGrades analyzed 41 million Medicare records in the study, which found a medical error rate of 3%. The study estimates the errors cost the Medicare program about $8.8 billion over that time frame. [Read More]
Medical properties: Defensive play in volatile times
Even the formerly steady commercial real estate market has seen some recent volatility. But not when it comes to medical properties, says Sean Tu, a vice president in Cain Brothers Real Estate Group's Chicago office, who says investors are looking for a safe investment in uncertain times. [Read More]
Finance Forum
Estimating Problems and Potential in Employee Health Management (Part I)
The number of hospitals and integrated systems that are investing in employee health management is increasing all the time. Their investments may be limited to their own employees, in order to control costs and optimize workforce performance, or be focused on EHM as a revenue- or "public relations-"generating service line for other employers. They may be limited to modest amounts and scope, or be a major strategic element. But whatever the application, estimating the size of the EHM "problem" and "potential" is a critical element in planning and managing, as well as evaluating the investments to be made. (Part one of a two-part article.) [Read More]
Finance Headlines
Medicare finds how hard it is to save money
New York Times - April 7, 2008
Orlando-area hospitals compete for heart patients
Orlando Sentinel - April 4, 2008
Most of East St. Louis hospital will close
St. Louis Post-Dispatch - April 9, 2008
West Penn Allegheny Health System profit up by two-thirds
Pittsburgh Post-Gazette - April 9, 2008
Medical gift is Duke's biggest
Raleigh News & Observer - April 8, 2008
Healthcare businesses take off at airports
USA Today - April 8, 2008
Upcoming Events
HealthLeaders Media News - March 24, 2008
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From HealthLeaders Magazine
Faith in the Hospital
HealthLeaders April 2008 In a shifting healthcare world, faith-based systems face a new set of challenges in their quest to stay true to their mission. [Read More]