For all its flaws and miscalculations, the hospital industry has a habit of learning from past mistakes.
Only a few years ago, health systems were obsessed with merger-mania, physician acquisition and ill-fated ventures into insurance plans. Many of the strategies were expensive and doomed to fail. Instead of reducing costs and avoiding duplicated services, aggressive system-building created financial and operational nightmares.
Yet there remains a need to create links among provider groups. In our June 18 issue, reporter Mark Taylor wrote about a gentler and more sensible way to build healthcare relationships. Rather than engaging in full asset mergers, financially healthy hospitals buy interests in smaller facilities in need of a cash infusion. The larger hospitals enhance their regional power and may snag patient referrals for tertiary care. They also might have a seat or two on the smaller hospital's board. The smaller hospital, in turn, can use the stake to invest in information technology, clinical equipment and expansion projects.
This "going steady before you get married" approach offers both sides the opportunity to measure the value of the relationship as it develops. It is a strategy worth considering.
A vote of confidence. Hospital managers got a vote of confidence from Uncle Sam with the release of two reports from the General Accounting Office saying that most healthcare providers don't intend to break laws designed to protect patients and government insurance programs.
Instead of dumping patients and duping the Centers for Medicare and Medicaid Services, the GAO reports, hospitals and physicians are led astray by confusing regulations and a complex system begging to be gamed.
Although it's true that the overall image of providers was unduly tarnished when the Clinton administration unleashed an army of well-financed investigators on the healthcare industry, the number of high-profile settlements and convictions proved abuse was not isolated.
Rather than rest on the laurels of the GAO report and the hints of tolerance from Congress and the Bush administration, providers must commit to full compliance and a greater effort to restore trust.