For starters, the hospital bill can be difficult to understand. Even Time magazine exposed the inaccuracies of hospital charges and the difficulties with transparency around reimbursement in its March 2013 cover story “Bitter pill: Why hospital bills are killing us.”
Yet the reality is that many hospitals are losing money and few have excessive margins. Hospital CEOs, despite running large, complex organizations, are under intense scrutiny about their salaries. Medical errors and safety issues in hospitals receive broad publicity. Debates focused on reducing healthcare costs often identify solutions for squeezing inefficiencies out of the hospital. Policymakers and insurance executives are rapidly introducing new reimbursement plans that reduce hospital-based utilization. Fraud and abuse programs target hospitals to recover funds and, in doing so, require them to implement time-consuming and expensive audit programs. New regulations are burgeoning, amounting to unfunded mandates on hospitals as they attempt to comply with the paperwork and reporting requirements.
While it might just be our industry's turn to be tagged as the bad guy, I believe this country's hospitals are the heroes in the story.
What other industries do not turn away customers who cannot pay their bills? American hospitals have cared for the uninsured and underinsured for decades and will continue to do so even with the advent of the Patient Protection and Affordable Care Act. The ACA, through the establishment of exchange products with higher cost-sharing and the rise of high-deductible health plans, will shift the burden of patient debt largely onto hospitals. This too, if we are not careful, will lead patients to view the hospital no different than they do their credit card companies. Whether it's losing the public's trust and respect, or gutting the financial core of these institutions, we have too much at risk to waste blaming the wrong guy.
So what if we changed the plot?
Let's not erect barriers to patients utilizing hospitals when they are sick. When designed correctly as “one-stop” diagnostic and evaluation centers, hospitals can be one of the most efficient settings for healthcare delivery.
When reimbursement rules are set and payment is denied by insurance companies and government agencies, hospitals should not be forcibly required to absorb all of the cost. They should not be the sole organizations bearing the burden of readmissions.
Most important is to reduce administrative costs in healthcare. The cost required to comply with the requirements of third-party payers and regulatory bodies is skyrocketing, forcing a shift of resources away from clinical needs. Hospitals need the equivalent of the federal government's Paperwork Reduction Act. Relief of administrative and regulatory burdens will translate into the lower healthcare costs.
We are headed in a dangerous direction if we do not challenge the current policies. Hospitals stripped of their resources will not be able to invest in new technology and have the capacity to respond to community needs. The reality is that hospitals are part of the solution.
Hospitals will never be immune from criticism. Efforts must continue to improve safety, efficiency, and to establish greater transparency and accountability. But allowing public policy and marketplace incentives to gut hospitals is a mistake. Let's remember that the majority of hospitals in this country are not-for-profit and reinvest their margins back into their communities.
Hospitals are a little like politicians. Apparently, nobody seems to like them as a whole, although people often make an exception for the ones that serve their own community. In this story, the villain is not all that bad after all.