For healthcare industry transformation to succeed, caregivers of all stripes must buy into the inevitable changes.
That's apparently the theory behind a new contract between Kaiser Permanente and its 4,800 nurses, nurse practitioners and physician assistants in Southern California. For the first time, nurses will get something akin to profit sharing if the health plan meets predetermined goals such as reducing operating costs, increasing enrollment and satisfying enrollees.
The annual rewards may only amount to something on the order of $500 to $800 per employee, but the concept is quite sound. As part of the agreement, nurses also will be consulted when Kaiser adjusts its ratio of licensed nurses to unlicensed personnel on a unit.
Not surprisingly, leaders of organized nursing don't like the arrangement. But it's hogwash to argue, as the American Nurses Association does, that the contract puts nurses in the same compromised position as doctors who earn rewards from HMOs for withholding service. Denouncing as an assault on quality every move to get fat out of the healthcare system is a counterproductive and shortsighted strategy.
Employers and others who foot the bill will not put up with a continuation of the old ways. New data for 1994 from the Center for Health Industry Performance Studies show that even hospitals in areas with low managed-care penetration instituted shorter lengths of stay and lower costs for surgical procedures. The findings suggest hospitals are making progress in positioning themselves to be survivors into the next century. Nurses also need to be part of the solution.
Maybe this is what people might have in mind when they talk about community benefits.
Northwestern Memorial Hospital in Chicago is using its $580 million hospital replacement project to help invest in women and minorities in its community. It's doing so through a commitment to award 25% of its contracts to minority-owned businesses and 5% of construction dollars to businesses owned by women.
One way it enticed participation was by agreeing to pay the $23 million premium for the general liability and workers' compensation insurance costs for the life of the project. Contractors reduced their bid by the amount of insurance costs they would have incurred. And, says Kathleen Murray, chief operating officer for the giant teaching hospital, the additional insurance cost was offset by the reduced payments it is making to contractors.
Others have undertaken efforts to assist their communities in uncommon ways. In another example, Ancilla System of Hobart is using $2.2 million in Housing and Urban Development funding to build low-income senior housing in nearby Gary, Ind.
Such meaningful contributions are what the debate over community benefits should be about, not whether for-profits or not-for-profits contribute more.