Saturday, December 20, 2014

Businesslike Healthcare

Paul Levy has another interesting post:

In it he recounts the the practices of Heartland Regional Medical Center, of St. Joseph, Missouri. Basically, Heartland is the Scrooge of healthcare. They pursue debts with a fervor and an unfairness that is hard to fathom. Someone gets sick and comes to the hospital, fails to sign up for the hardship program that would reduce charges, and thus becomes ineligible to sign up when the program is eventually discovered, because they didn't start out as members of that program. Because there is a cap on how much they can recover from one paycheck, Heartland sues both wife and husband to get a part of each paycheck. Etc.

It's bad enough when corporations in other fields pull this. But in healthcare? Yes, healthcare needs better business methods. But when you think about it, "businesslike" seems to have two separate lines of thought, even two different meanings. On the one hand, good business is knowing your costs and recovering them, producing a better product, increasing efficiencies, etc. On the other hand, business practices can be rapacious, grab the money, go for the gold, do whatever it takes, etc. When people say that healthcare should be “run like a business,” mostly they mean #1, not #2. But if you confronted Heartland, odds are they would say “we need to run it like a business,” and mean #2, not #1.

Reading this reminded me of the dinner I had last Wednesday with two healthcare consultants and my long time close friend, Steven Wright, who is at once idealistic and ethical, and a practical and effective healthcare manager. Steven has run many programs in the mental health and alcohol and drug areas, and inevitably takes a failing program to effectiveness and profitability. He most recently did this with Thunder Road, an Oakland program for troubled youth. He brought this program to effectiveness and profitability, although a program in this field will never be a big winner – just breaking even is an achievement. Unfortunately, bringing the program to profitability was soon met with the declaration from Sutter Health, the owners who inherited the program, that Thunder Road had to be sold, because it didn't fit in with what they were trying to do, maybe didn't fit with their “core competencies.” The health consultants we were dining with nodded with sad and knowing assent. They know healthcare corporations like that.

(It reminded me also of the new owner of The New Republic, a magazine that had never run a profit and was never intended to. Let's go vertical, let's go digital, let's go Silicon Valley, said the billionaire owner who had been the roommate of Mark Zuckerberg at Harvard. Let's make money. Ambitious, arrogant, steeped in the modern digital culture that produces greedy young jerks. But I digress. Let him be a jerk, and I never liked The New Republic that much anyway. Maybe he'll learn something.)

But you just have to think, is profit an objective, or a constraint? If your objective is to help people one way or another, then profit can be a constraint – you can serve people, but only with the constraint that you can't lose too much money doing it, or you will go out of business and help nobody. If, however, it's the reverse, you then want to make as much money as possible, with the constraint that you do have to help some people along the way. Or at least not hurt them too much. Or at least not get caught hurting them too much, which would then start hurting profits.

So, if I look at a healthcare program, I have to think: OK, run it in a businesslike fashion, but is it businesslike #1, or businesslike #2? Are they doing well by doing good, or just doing well? The difference is pretty important.

Budd Shenkin