BASEBALL and HEALTHCARE

The Oct. 24th issue of the New York Times has an interesting article "How to Take American Health Care From Worst to First." In it the authors, Billy Beane, Newt Gingrich and John Kerry, note how the big payroll baseball teams are not in the World Series while the team with the second lowest payroll is. They attribute this to the fact that Tampa Bay uses a data-driven approach to decisions rather than the traditional approach that was based on a manager's experience and a few statistics.

The authors cite several examples that support their argument that "a health care system that is driven by robust comparative clinical evidence will save lives and money." Many other observers are also pushing an analagous approach to healthcare by emphasizing that quality of outcomes can be greatly enhanced with the use of technology, not just in new diagnostic and drug discoveries, but in communications and measurement of results to reduce human error and analyze what treatments do and do not work. Of course, a major issue in moving towards this type of approach to medicine is how will the technology be paid for, especially by the smaller hospitals and speciality services. One solution to this financial conundrum, especially with today's liquidity crunch, is through a medical accounts receivable funding program from Sun Capital HealthCare. Sun's program transforms a provider's medical receivables from a non performing asset into a cash flow solution to reimbursement delays that is not subject to the wild swings of today's credit markets.

Healthcare is like baseball in other ways as well. While the researchers and device makers often seem to be trying to hit a home run [so their stockholders can earn a return], in many ways 'small ball' can yield a better result. Reducing obesity, getting more exercise, good eating habits and focusing on prevention is a lot less costly in the long run and a lot healthier, both for the patient as well as the healthcare system.

Hospital Closings - So Who Cares?

Emily Friedman has written a blistering article in the August 6th issue of H&HN Magazine on the subject of hospital closings, one that I would suggest anyone with an interest in the healthcare system should read. She paints a bleak vision of the future, unless something changes in the way we view the delivery of healthcare to our citizens. While covering hospital closings for 30 years, she sees some common factors in the current spate of closings that "...are frightening as they are disheartening."

The first factor she cites is "market mania", the idea that market economics will make the healthcare system work for everyone. But, she notes that the "...economics of healthcare, far from being humane, have become Darwinian" with its reliance on a market ideology that, in her opinion, is a failed ideology. Unless, as she notes, "....you think that it's just fine to have 16 boutique hospitals in every wealthy suburb while people in poor communities die for lack of basic emergency care."

The second factor she discusses is "a lack of anything resembling planning." As Ms. Friedman notes, "...we plan golf-course communities, downtown renaissances, parks, transportation systems, olympic sites and public bathrooms; surely we can find a way to have at least a semi-rational distribution of hospital resources."

Ms. Friedman cites a number of other factors that have contributed to what she clearly feels is a critical turning point for the healthcare industry. With the growing disparity between the "have" and "have not" hospitals in terms of revenues, margins and access to capital, the "...question is whether the luckier hospitals feel any obligation to those that are vulnerable" and, I would add, do the well-to-do patients feel any obligation to those less fortunate.

Those of us on the business side of healthcare, such as Sun Capital HealthCare, Inc. which provides medical accounts receivable funding, can address financing for the healthcare industry, but as Ms. Friedman points out, there is a more profound question that the country as a whole must resolve and that is what do we want our hospital and healthcare system to be.

Rethinking Patient Flow

Joe Flower wrote a very interesting article "Change The Model" in the July 9, 2008 on-line issue of H&HN Magazine, discussing the increasingly difficult climate for hospital survival. In it, he notes that while capital is necessary to a provider's growth and success, "the most important input a hospital needs is patients". And the critical factor in patient flow is the primary care physician.

However, he notes the decline in primary care doctors, to the point that in 2005, only 8% of medical school graduates were going into family practice. If the hospital model is dependent on patient flow coming from primary care physicians [or from specialists who themselves have been referred to by primary care physicians], then this shrinking of primary care doctors necessitates a rethinking of the hospital model and where and how the flow of patients can be generated. Flower's solution is that hospitals must increasingly take on the role of primary care providers and he suggests a number of ways to do this.

His solutions, however, seem to fall short of really addressing the issue of increasing the supply of primary care physicians. Companies like Sun Capital HealthCare, Inc. can provide the financial means and working capital hospitals need, but for the healthcare system to survive, the need to attract more primary care doctors into the system must be addressed. Financial incentives, medical school curriculums, geographical considerations, electronic records/remote capabilities, etc. all must be considered when looking at redefining the hospital model and reinvigorating a healthy healthcare system that is referral based. Let's bring back "housecalls" to the healthcare system.