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We Reap What We Sow

by Nick Jacobs

After nearly two decades in health care administration, it is apparent to me that the System is shaking out in ways that may prove to be both very interesting and disparaging to many of our citizens.   In the recent Wall Street Journal Article, Care Gap  Hospital Building Boom Sparks Fear Cities Will Be Left Behind, the nuances of the current five year, $100 billion building expansion that has taken place from 2000 to 2005 in the industry, the majority of that construction has occurred in the suburbs in order to allow the hospitals to target the affluent.  This, according to the article, has resulted in a financial struggle for the urban centers that often treat the poor.  The result of this movement?  “Scores have had to shut their doors.”

As long as we’re speaking of endangered species, during the previous administration, after the proposed health plan was rejected, small urban hospitals emerged as a target for extinction as new reimbursement methodologies were unrolled during the Balanced Budget Amendment Act.  The government group think became, small, urban is bad.  In fact, it was immediately after those times that compensation exception carve outs began to appear for urban, teaching centers and small, rural hospitals while small, urban hospitals were allowed to wither on the vine and die.

It was a cold, windy, February in 1997 when my first CFO explained to me how employee salaries were reimbursed in our area.  If you weren’t big, you got much less, and then had to struggle to keep your employees compensated well enough to prevent their exodus to the other more highly compensated facility.  That first year we considered having revolving doors installed at our medical facility to allow employees to get their six months experience, advanced certifications, and leave effortlessly to take a position at the more robustly reimbursed centers near us.

These many years later, we have stabilized our workforce and our bottomline, and found a way to stay viable for now by using creative approaches to delivering care that is paid for from different medical pockets, but the future does not look very bright as three of our closest peers closed their doors in the past several months due to bankruptcy, litigation issues, and competition from the more highly reimbursed.

In the restaurant business, it is possible to have an extraordinary ability to generate amazing profits in a small setting through offering superb service and fantastic fare, at exorbitant prices.  In a hospital the immediate assumption by the public is that bigger is better and that the market does what the market does.  Meanwhile, many of our compassionate, national, medical gems are facing deep financial challenges and many more of our small, wonderful, well run facilities with low infection rates, high quality physicians, and sometimes incomprehensibly, compassionate care are, across these United States, being absorbed, closed, swallowed and crushed by the current system.  If you are not a core, academic medical center or an isolated, rural center, it appears that your days are collectively numbered.

It is obvious that the middle class is disappearing in our country, and that we are allowing the care for the poor to become as marginated as they themselves are.  It is apparent that, after one hundred years of survival and uniqueness, many of our smaller institutions are being run out of business by the current system.  Where are we going as a country?  Where are we going as a society?  Where are we going as providers of healthcare?

As the clock ticks closer to closing time for the Boomers, the need for uniqueness should not be waning.  The desire to experience wonderful, personal care in a competent center of excellence should not become an historic and removed option.

Reimbursement for the facilities must be examined as more and more we allow purely, materialistic approaches to the provision of healthcare in our country. Additional public and private sector scrutiny needs to take place as more individuals are exposed to the facts.  We need to consider helping to ensure that the inner cities will not languish and provide even less for those individuals who need it most.

It was my pleasure to visit a 100 bed not for profit hospital last year that had a bottom line of $35M dollars. It, indeed, was located in a rich suburb.  It was also my displeasure that same year to see several other medical centers forced out of business by the reimbursement system currently in place.

Unlike the steel mills of Chicago and Pittsburgh and the fabric mills of North Carolina where the vast majority of those products are now being manufactured internationally, it is going to be hard to get an infection free appendectomy if the clean, efficient little medical centers disappear, and urbanites may experience hospital growth in the burbs, but what about those individuals struggling for care in the transition zones?

In conclusion, it is all about US, and we are the force that can and will change the future.  All we need to do is care a