Wednesday, August 01, 2007

Follow the Profits, Not the Patients

"It'll increase health care costs" has become the label of choice for health care executives commenting on a competitor's moves, while "it'll decrease health care costs" is shorthand for the moves that an executive's own company makes.

Case in point, the recent move by provider giant Aurora to buyout clinic giant Advanced Healthcare. This move is allowing Aurora to build a new hospital in Grafton, just under five miles from a Columbia St. Mary's hospital that's going through a $72 million expansion.

According to Advanced Healthcare president in the joint press release announcing the buyout:
If we can coordinate care for our patients, ensuring that they receive the right care at the right time and in the right place, we can improve outcomes and reduce costs. That’s what integrated care is all about, and that’s what Advanced and Aurora will work toward.
Contrast that with the reaction by Columbia St. Mary's CEO Leo Brideau:
You have a community that has a ton of unmet needs in Milwaukee County. And the last time I looked around, there were no unmet needs in Ozaukee County.
Adding: "There is no question among health care economists that adding excess capacity in a market drives up health care costs."

My guess is that Aurora's move won't do much at all to health care costs; they'd continue to go up either way. The idea that coordination of care is going to increase significantly under this buyout is a bit of a stretch. All that will change is that Advanced Healthcare patients will start getting referred to the new Aurora hospital rather than Columbia St. Mary's or Froedtert. That's not more or better coordination, nor is it less or worse coordination; it's just different coordination.

But what I love the most about this buyout is the reaction it's brought by execs like Brideau. While Brideau is certainly more on target about the impact of the buyout than the press release by Aurora and Advanced Healthcare, in the process of explaining his point, he essentially shots himself in the foot.

The line about "a ton of unmet needs in Milwaukee County" was obviously a shot at the placement of this new hospital in the well-insured, yet not that densely populated, Ozaukee County.

But it also brings into question the lines Brideau was giving the Journal Sentinel just a few days ago about his system's plans to cut licensed patient beds by 33 percent in Milwaukee County. And this is a little over a year after Wheaton Franciscan closed the only other hospital on the north side of Milwaukee, leaving Columbia St. Mary's as the lone hospital provider in the immediate area for many residents.

Just as I pointed out the other day, the question of why Columbia St. Mary's would reduce its beds by 1/3 in an area with "a ton of unmet needs" -- while funding a $72 million expansion in an area with "no unmet needs" -- is answered perfectly by another quote from Brideau in today's JS:
Let's be honest about this. It's not about integration. It's about moving into a market they think can be profitable.
It's gotta be like looking in a mirror sometimes.


Side-Note: On Monday I mentioned an online debate that's supposed to be taking place between John Torinus and David Riemer on the Healthy Wisconsin plan today at noon on the JS website. However, I haven't seen anything advertised for it, so I'm double checking to see whether it's still going to take place. I'll update back when I hear something.

UPDATE: I'm told the online debate is still on, even though advertising by the JS has been sparse to non-existent. If you're interested, I suppose your best bet is to check out the JS site at noon to see if anything about it is there.

UPDATE II: You can find the Torinus-Riemer debate here.



Blogger Dad29 said...

You're right.

SO what's new about Aurora?

August 01, 2007  
Blogger Jack Lohman said...

The only thing that will eliminate these abuses is the return of the Certificate of Need, which the health care industry has paid big cash dollars in campaign contributions to defeat.

Our politicians should be very proud of themselves for that one. Since the CON demise the health care costs in Milwaukee have skyrocketed.

With the CON still in place, and Healthy Wisconsin paying all hospitals the same amount, St. Mikes, Lutherine Deaconess and other hospitals would not have been closed, and the Aurora power grab would not have been allowed.

It's all called Follow the Money, and here it leads directly to politicians with their hands out. We need a massive turnove in Madison.

August 02, 2007  
Blogger Seth Zlotocha said...

Thanks for your comment, Jack. I wasn't aware of the CON issue. I'll keep that in mind in future posts on this subject.

August 02, 2007  
Blogger Dad29 said...

The CON was contained (IIRC) in the State's old Review Board function.

Limited hospital emplacements as well as rationalized services-offered in existing hospitals; that is, there would not be three or four "heart" specialty hospitals in a given area.

August 02, 2007  
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