The full-service, general hospital is evolving to a new conception. The growing clinical complexity, the need of performance transparency to evaluate quality, the rising costs and the increasing competition are questioning the old paradigm that any hospital could excel across a broad spectrum of clinical service lines.
Most private hospitals have nowadays shrinking profit margins, and they are focusing on analyzing cost-accounting data to determine the profitability of patients and the different procedures they offer. This analysis is uncovering very profitable margins in certain activities, while pointing at other activities that are a clear loss to the center.
This is why new healthcare services, including specialty hospitals and outpatient centers with low-cost structures, limited complexity, and focused, high-quality service are emerging. Competitors like these are raising the performance bar for general acute-care hospitals.
Well, the old paradigm says “all volume is good volume”… and this is clearly nonsense from an economical point of view. When a hospital understands where its true profitability and expertise lies, it can be focused to generate value while cross-selling other hospital services to current patients.
Of course, there will always be procedures that are necessary while being not profitable, so, some procedures should continue operating at some level to help hospitals meet basic community needs and cover fixed costs. But my point is, in the private space we will see more and more specialization to achieve better efficiency. A new generation of healthcare services is on its way.
Tuesday, November 18, 2008
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2 comments:
>data to determine the profitability of patients
I really have many doubts about any patient (real ill. pluripathological patient) to be profitable. Most of them will not.
I'm seeing that strategy of concentration in areas of higher profitability in my own hospital (a private institution).
The hospitla manager uses to consider under the light of the accounting data that surgical procedures (specially ambulatory ones) are the most profitable.
However, there are some tricks, because sometimes the quality of the service depends not only in the "surgeons" but for example in a strong Internal Medicine team, able to manage complications after surgery, or a strong Critical Care team.
Of course we are not facing the "wild side": the outcome will depends strongly also in the quality of Primary Care post-surgical services that are curiosly isolated from the analysis.
A classical example: a private clinic where delivery is the main activity. Delivery could be a really profitable activity when everything goes well (you do not really need too much technology, in fact delivery is a natural process).
However, when things go bad, the quality of the outcome (and even the life of the newborn) could depend on a strong neonatology team (that is expensive and not so much profitable).
From a "accounting" point of view you could state that obstetrics department is very profitable and neonatology critical care is not, and remove the second from your priorities.
But in health-care you can not isolate the "funcional areas" of your business, as far as the outcome (health of your patients) is strongly related with every aspect of your organization (from laboratory quality or the primary care nurse to the super-star neurosurgeon with a exclusive procedure)
Hopefully Spain will soon copy Europe and provide a wider range of healthcare in its hospitals.
Whilst in the UK, where I currently work, as an inpatient you have access to a team of physiotherapists, dietitians, speech therapists, occupational therapists, social services, podiatry, and , of course, doctors and nurses; in Spain a hospital mainly consists of doctors and nurses full stop.
I agree with Dr Bonis in thinking that patients are usually not profitable. I'd go a bit further and say I think they shouldn't be, but that's a whole different debate. Anyway, in trying to make them more profitable we should not forget allied health professionals. A patient with vocal cord nodules early referred to a voice therapist helps reducing costs of surgery lists, as therapy is successful 80% of teh time and he will not require vocal cord surgery. And a long list of examples could follow.
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