Hospitals Competition Is Not Like a Pen, But Should Be.

A commenter questioned how care could be implemented in acute care/crisis situations. To me it is quite obvious.  First of all there are two hugely different aspects of care. Outpatient medicine is by nature, mostly non emergent. It is very amenable to competitive forces and competition begets innovation. That is a fact. We need competitive forces to create happy consumers, happy doctors. WIN-WIN.

What you bring up regarding critical care access is more a function of emergency medicine, critical care.  Hospital stuff.  Hospital competition is in the grips of suppression by giant lobby groups to keep the status quo. When you have no competition in the hospital system, quality can suffer and costs aren't contained. Compete or bankrupt is not the rule. Monopolize and expand regional care. That is the goal with anti competitive practices.

Not much different than say, cable companies, before deregulation. You don't like our price. Tough. What are you going to do. Read a book instead?  There a big deal with specialty hospitals popping up and "killing" the behemoth hospitals who provide everything for everyone.

If a specialty hospital can provide something just as good or better for a cheaper price, then that is good for the consumer. Let me repeat that, than that is good for the consumer. Is it good for the other hospital losing business? It can be. Absolutely.

Competition may force it to look at it's own processes, find ways to slim down, to decrease the cost of doing their business. Find a way to offer their service for a cheaper price. It does not guarantee defeat. That's like saying Japanese auto makers can't compete in America because it will make GM cars worse. It is simply a ridiculous concept. I suspect American cars are better because the Japanese forced them to make a better car.

Compete for the best at the lowest price, or go bankrupt. That is a universal concept.  Competition begets innovation. In the current reimbursement scheme, a specialty hospital will get paid the same as the big hospital offering the same service. If the specialty hospital can do it cheaper, it earns a bigger profit.

Specialty hospitals can force others to do the same thing cheaper, by innovating their own cost structure and becoming leaner. Thereby lowering the price of the service for all.  In the current reimbursement scheme a hospital claims it uses these lucrative procedure based services to subsidize other "money losing services such as primary care and psychiatry." That may be the case, and the system in place is wrong for doing that.

The problem with this reimbursement scheme is that ALL services should be reimbursed commensurate with their time and money required. I see no reason why one service should subsidize another. They should all be paid for appropriately. Primary care hospital admissions should not be subsidized by the revenue generated from a total knee replacement. This entire concept is ludicrous.

Why is it like this? I have no idea why.  If you need heart caths/ bypass operations to subsidize your general medical services, then millions/billions of dollars will go to providing these "money making' procedure services at the expense of the money losing services. Why not make them all money making and remove the competition between services for the health care dollar.

If you make every admission a potential money making proposition for a hospital , not win vs lose, but win-win for all, then the entire hospital system is open to competitive forces, not just the "money makers". It is an amazingly backwards system. The sickest hospital admissions get reimbursed at the lowest rate. That is why hospitalist medicine has exploded, to limit the loses incurred. Money, money, money.

You would have specialty hospitals all throughout the country opening up to provide good quality, cost controlled treatment for "pneumonia, or CHF, or kidney failure". Good quality hospitals that specialize in the treatment of disease, not specialize in procedures.

I suspect this would create a major incentive toward quality medical care more than any government mandate ever will. Not simply a drive to acquire the latest technology that pays the highest rate of reimbursement and enjoyed by such a small fraction of society.

Right now, competition between hospitals is limited to the highly reimbursed procedural specialties. You have out patient general surgical centers (most pay for least effort), outpatient orthopaedic hospitals (most pay for least effort), and heart hospitals (most pay for least effort).

Why not have an explosion of specialty hospitals that compete for internal medicine patients, you know, the sick ones. The ones who need a hospital. The ones who make up most of the patients. The expensive ones. The ones who need the most quality driven medicine out there. Guarantee an adequate payment structure for these admissions and watch hospitals compete on price through cost savings. Tis is my theory.

Internist admissions generally lose money for a hospital, while surgical/procedural generally make money, tons of it. It is all messed up, backwards priorities courtesy of your local medicare rules and regulations.

Make every one's medical problem a priority for cost effective care, not just the heart caths and total knees. My sick pneumonia patient (you out there reading this) is as important as the heart bypass patient. I wonder how the public would feel if they knew the heart bypass patient was more important financially to a hospital than grandma with pneumonia. The difference in reimbursement rates by medicare is staggering. Even if grandma with pneumonia spent 2 weeks in the hospital, and grandpa with his heart surgery, only 3 days.

Again, the reimbursement system and it's priorities are all backwards. It suppresses competition in the largest population of hospital patients, the sick ones.

Right now you have super hospitals with limited regional competition, each thriving to be bigger, but not forced to be better, or cheaper.  Why does the cost of hospital care outstrip inflation year after year after year.  Where is the innovation. There is no motivation to compete. Their lobbyists own Congress, and suppress competition. It's all about money.  Otherwise, how do they survive. Bigger, more expensive.

If GM priced their cars with rates of inflation like hospitals, they would have gone bankrupt years ago. Nobody would buy them. Their cheaper better Japanese cars would have swallowed them up. They must adapt or become irrelevant.  Hospital costs eat up 1/2 of the trillion dollars per year so to make any dent in the system, you most over haul hospital reimbursement too.