Page 58 - BusinessWest November 9, 2020

What’s Next for Hospitals
Beset by Wasteful Spending, American Healthcare Needs an Overhaul
TBy Spiros Hatiras
he year is 2020, in the midst of an
unprecedented pandemic, and the
subject is the U.S. healthcare system — more specifically, the average U.S. hospital. Is it alive and well, or is it ailing?
I will argue that all is not well with our health- care system, and that the average U.S. hospital is facing tremendous challenges now and for the foreseeable future.
It is important to establish that, while the healthcare-delivery model has been shifting to less hospital-centric models, the acute-care hos- pital remains solidly in the center of our delivery system and, in my opinion, will continue to do so. Any notion of a more decentralized model with less emphasis on hospitals has been pushed many years into the future, in part as a result of the COVID-19 pandemic. Despite the accelerat- ed growth of telemedicine during the pandemic, the need for hospital bed capacity, specialized equipment, and personnel — including the abil- ity to ‘surge’ when needed — has all but ensured that the trend toward a smaller hospital footprint will slow down if not entirely reverse.
Shouldn’t that be good news for the future of hospitals? Well, not quite. While we may have a new appreciation for the need of readily avail- able inpatient hospital care, we have also not solved any of the problems that hospitals have
been facing for many years. In fact, the pan- demic laid bare one of the most fundamental problems facing the industry, especially for smaller community hospitals. At the very onset of the pandemic, it was
immediately clear that many hospitals, suffering from years of underfunding, faced immediate financial threat and would not be able to sur- vive without a financial bail- out, while private insurance companies reported record profits.
Why is this the case in
a country where health-
care demands the highest
per-capita expenditure of
all developed countries? According to a study published in January 2019 by the Johns Hop- kins Bloomberg School of Public Health, the
U.S. topped the ranking of healthcare spending among developed countries in 2016 at $9,982 per capita per year, a figure that is more than double the median of $4,033.
The reason for this disconnect is that most of that money is spent not on actual care, but on administrative costs. A recent study by the Center for Medicare and Medicaid Services
found that, of the $3.5 trillion spent on health- care in 2017, 33%, or $1.1 trillion, was paid to hospitals. Unfortunately, a significant portion of that money covered unnecessary costs to pro-
“
our healthcare system, and that the average U.S. hospital is facing tremen- dous challenges now and for the foresee- able future.”
cess bills and get paid by insurance companies, meaning the total spent on actual hospital care was far less. The same is also true for doctors’ offices.
I will argue that all is not well with
In a study published in 2017 in Annals of Internal Medicine, Steffie Woolhandler and David Himmelstiein noted that the administra- tive cost of our healthcare system was estimated to be $1.1 trillion, of
which the vast majority
is excess and unneces-
Continued on page 25
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Healthcare Heroes
A program of BusinessWest and Healthcare News for the entire organization’s response, under the leadership of Spiros Hatiras, in supporting the Holyoke Soldiers’ Home.
What’s Right in Healthcare
Huron | Studer Group 2020 Healthcare Hero Award presented to President & CEO, Spiros Hatiras for HMC’s quick response in supporting the Holyoke Soldiers’ Home.
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Four national and state awards including Get With The Guidelines®- Stroke Gold Plus, Target: Stroke Elite Plus, & Target: Type 2 Diabetes Honor Roll Award (American Heart/ Stroke Association).
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Platinum Award for Promoting Organ, Eye, And Tissue Donation in the hospital and in our community from Health Resources & Services Administration/U.S. Department of Health and Human Services.
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