Changes that are revamping the healthcare industry threaten to pit the all-American practice of capitalism against the time-honored mission of community service.
The possible result may be a profound shift in the way hospitals operate. The potential concern is for how typical Americans will fare when hospital care is needed.
Industry changes are best exemplified by the wave of mergers, acquisitions and stock swaps in healthcare. While a shareholder model boosts an institution's "stock value," there's no corresponding improvement in the services it provides.
What will happen to the many outstanding hospitals owned by not-for-profit organizations? They operate out of a sense of mission and community service, not with one eye trained on shareholders' return on investment. And what will happen to the communities that they serve?
Some argue that there's no inherent conflict between the goal of serving patients and the community and the goal of making a profit. But there's a "chicken-and-egg" phenomenon that should cause some to pause.
In a not-for-profit, mission-driven hospital, the first goal is to treat patients and serve the needs of the community; the second goal is to generate enough revenues to make that mission possible. In a for-profit hospital, the first objective is to ensure a financial return for investors. That puts community service in a subservient role behind generating financial returns.
That may sound like a subtle distinction, but the order of priorities does matter to hospitals' communities.
At for-profit hospitals, the profit motive affects many decisions. Where to locate? The typical for-profit hospital is a mid-sized facility in a community where most people have private health insurance. What services and programs to offer? For-profits' services are likely to be routine surgeries, pediatrics and maternity care. Special programs are designed as profit centers and geared to well-insured patients. What prices to charge? Studies show that prices at for-profit hospitals are higher than prices charged by not-for-profit institutions.
The implications for healthcare and the nation are significant. At least one industry analyst has described such for-profit corporations as Columbia/HCA Healthcare Corp. as adopting the Wal-Mart-like strategy of providing a chain of low-cost, high-quality hospitals. This description is in response to critics who say for-profit hospitals charge higher prices.
However, when the Wal-Mart analogy is applied further, it becomes sadly ironic. By locating hospitals according to the same market factors used to locate Wal-Mart stores, some fortunate communities would have both a Wal-Mart and a hospital. Many others-mostly poor-would have neither. We are about as likely to see a Wal-Mart open on the devastated West Side of Chicago as we are to see a for-profit hospital open there. The same could be said of Appalachia or rural Mississippi.
So if for-profit organizations reject financially unattractive communities, who will be left to serve the impoverished inner city, where expensive trauma centers are needed? Mostly, it's the comprehensive, university-affiliated or community-based, not-for-profit hospitals. Because of their locations, those institutions struggle to attract enough insured patients to balance the financial burden of treating mostly indigent and uninsured patients.
This phenomenon is occurring now in Chicago. Columbus-Cabrini Medical Center is a three-hospital Catholic health system in inner-city Chicago that's directly involved in the struggle between for-profit and not-for-profit hospitals as they stake claims for patients.
CCMC is one of several Chicago healthcare providers dedicated to serving inner-city patients, including those who are poor with no insurance. Because of our locations, it has become increasingly difficult to continue to serve the medically indigent while also attracting enough privately insured patients to maintain financial balance to keep our hospitals open. With more for-profit hospitals, this balancing act becomes even more precarious as the not-for-profit hospitals continue to put mission first and economics second.
Recently, Columbia/HCA vowed to own 10 to 12 hospitals in Chicago in an effort to create a dominant hospital network. This will bring competition to the existing not-for-profit hospitals who treat the poorest of the poor. What does it mean to the ever-growing number of uninsured patients who have little or no money for healthcare? That depends.
Competition creates winners and losers in hospitals' battle for insured patients. For losers, the end result means shuttered hospitals and medically underserved communities.
Instead of the winners-and-losers cycle, wouldn't our collective energy be better spent working collaboratively to serve patients in all communities? That's the long-term approach Columbus-Cabrini Medical Center has adopted. We believe it's only through collaboration that inner-city communities-those that are poor and unattractive to for-profit healthcare organizations-will continue to receive needed quality healthcare.
It remains to be seen how President Clinton's or any other healthcare reform package will affect healthcare for the poor and uninsured. Perhaps it's only under national healthcare reform that not-for-profit hospitals will be able to stay afloat in poor areas. But that will depend on whether government really will pay its share. Throughout history, when the government promises to close the gap, it's fallen short.
Throughout the debate over healthcare reform, two questions should be asked. Do we, as a nation, consider equal access to quality healthcare to be a right? If the answer is yes, does a competitive model assure equal access?