Alternatives for the Hospital's Future

In Preneur's view, the hospital has four choices:

1) Continue its independent status. This alternative might be everyone's first choice, but the hospital is vulnerable to competition, especially from Capital City. Hospital chains, there or elsewhere, can profit from economies of scale and offer group contracts to insurers (whether insurance companies or employers) that will save them money. If that care is provided outside Mapletown, the result will be a continuing decline in census and revenues, reductions in the level and quality of services, and eventually an inability to provide any level of indigent care at Mapletown Hospital.

2) Merge with a group of local physicians, guaranteeing a patient flow from their practices and attempting to establish Mapletown Hospital as the heart of an independent network of health care providers who would be reimbursed by employers and other insurers. The network would strike the best deal it could with regional employers. This strategy would have several outcomes. First, it would guarantee provision of indigent care only if area employers would pay rates that make cost shifting possible, and their willingness to do so cannot be assumed. Second, this alternative would restrict patient choice by covering charges only for providers belonging to the Mapletown network. Patients most affected would be the well-off who tend to go to go Capital City for specialty services even when the same services are offered in Mapletown; they would have to pay for that privilege out of their own pockets. Third, by limiting insured reimbursement to physicians who are in the network, the network alternative would protect Mapletown's physicians, especially specialists, from outside competition. Thus, some critics have described this alternative as guaranteed access to mediocrity. If the hospital adopted this strategy, the argument for investing in the lithotripter would be strengthened, as the availability of a local lithotripter would increase the service options in Mapletown itself.

3) Merge with another hospital or group of hospitals. If Mapletown Hospital were to join a larger network of nonprofit hospitals, local control of the hospital would be compromised. Mapletown employers could contract with a regional entity; some patients would go to Capital City for services that they now receive in Mapletown. This alternative is clearly less attractive for the specialist physicians in Mapletown; a merger might risk the viability of their practices. Moreover, many Mapletown residents want their health care provided locally; the problems of getting time off from work or providing child care in order to travel to Capital City outweigh the advantages of its medical resources. In a merged system a lithotripter -- let alone two -- would be a white elephant. A lively prospect of merger makes the investment problematical at best.

4) Finally, the hospital could be sold to a profit-making corporation, with many of the same effects as in (3). The prospect of this possibility has aroused many Mapletown citizens, who have expressed keen anxiety about its implications for patient care. A group of critics has begun meeting together, and the local paper has reported their concerns about "bottom-line medicine." They have published numerous letters to the editor stressing the need to provide care for the medically indigent and arguing that if the hospital is run as a business, its primary concern inevitably will shift from patients' welfare to stockholders' profits. Quality will fall victim to a search for efficiency.

Making a Decision

In his office the next morning, Preneur was still mentally rehearsing the hospital's possible courses of action and their implications for the purchase of the lithotripter. Concerned that the board had never talked about these alternatives in systematic fashion, he decided to phone Ed Ministrator to suggest that the discussions be undertaken over the next several months. Just then his secretary announced an incoming call - Dr. Ida List. "Andy," she said, "I just ran into Stone at the hospital. He's giving the board a deadline: we have to vote his proposal up or down at the next meeting."

"Oh, that's just great!" Preneur replied ironically.

Поиск по сайту: