The Next “Too Big To Fail” -The US Hospital-Based Health Care System
Posted on Fri, Jan 22, 2010 @ 11:11 AM
We as a country seem to have a penchant for the big. Big, we think, is always good. When the big becomes no longer good but bad and ugly, we ignore the old saying "the bigger they are, the harder they fall." Witness the last year in the financial industry and the destruction the very big have wrought. But taxpayers bailed that industry out. And just around the corner I believe is the hospital-based portion of our health care system.
By way of background, when the federal government became involved in health care with Medicare and Medicaid, it became obvious to business interests that the business of medicine was far too financially rewarding to be left in the hands of mere doctors, nurses, and patients. Medicine was referred to as a cottage industry. So the denial-of-care models for HMO's were sold as our cost-saving salvation. People bought that idea for awhile until they got sick. Then they didn't like HMO's anymore. Next, hospitals and hospital systems were sold as being able to bring down costs with economies of scale.
But the economic engines of these hospitals and hospital systems had to be fed. New diagnostic testing and treatment procedures became profit centers instead of advances in patient care. Men and women who had never taken care of patients in their lives became the decision makers of medical practice within the hospital systems, and created giant lobbies, such as the one for the American Hospital Association. And because they were able to speak the language of business to bureaucrats, their loud financial voices were heard in the halls of congress, and amplified to their political patrons. And they were rewarded for their efforts by Congress. A striking example of this is the exemption of hospitals from legislation that prohibits self-referral. Most people, patients as well as legislators, do not know that hospitals are paid far more for such tests as MRI, X-rays, sleep studies, endoscopy and numerous others, than are outpatient facilities for the same test, because hospitals tack on a "facility fee". This extra reimbursement is paid both by Federal and private insurers. Hospitals also receive large government subsidies for their "losses". These issues have not even been discussed so far, in the rush to "reform".
These large hospital systems continue to buy the general practices of primary care physicians, who are then encouraged to refer patients only within the hospital system itself. Thus, fewer and fewer primary care givers are free to choose the best care for their patients by selecting test centers and physicians based on quality. Similarly, large hospitals are buying up rural hospitals, where the elderly and poor used to go for care close to home, as feeder hospitals, with one of the results being that the last dollar possible is extracted from federally insured patients in their final months of life. And these hospitals and hospital systems continue to build new buildings. This consolidation of the power of hospitals and hospital systems is removing a large component of competition from the American health care system.
The irony is that most of the real patient care that goes on in this country has nothing to do with inpatient hospital care. It could be delivered in appropriate outpatient settings that should not be owned by large hospital systems. After all, the goal of medical care should be to keep patients out of hospitals if possible, using them only as a last resort. You can get sick in hospitals, and you don't want to be there unless you have to be.
And most preventive medicine in this country, with its good water supply, required immunizations, and shelter for most of its people, could be delivered by health departments, family practitioners, and internists. Yet general practice physicians are the lowest of the low in reimbursement. They frequently go under and are forced to sell their practices to middlemen hospitals and hospital systems, which keep gobbling up our healthcare dollars.
We should not treat the disease of increasing medical care costs by building ever larger hospital based care delivery systems, the iron lungs of the past. Instead, we should develop the vaccine, which in this case, is the removal of hospitals from outpatient care, whenever possible, by removing the profit motive they have for getting involved in outpatient care in the first place.
We need to reimburse hospitals and hospital systems adequately for the important inpatient work they do, but they need to be taken out of outpatient healthcare. Let's learn from the financial crisis of the past year. Too big to fail is, simply, just too big.
- by Vernon Rowe, MD