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10 October, 2012 Posted by John G. Self Posted in Healthcare, Leadership
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This Time It Is Different

Posted October 10th, 2012 | Author: John G. Self

Believe it or not, there are still a lot of hospital CEOs who think that, in the end, everything with healthcare reform and deficit reduction will work out and that their lives running hospitals will not be turned upside down.

As a consultant whose fortunes are intrinsically linked to the well-being of community health systems and hospitals, I wish it were true. 

I recently met with a group of hospital CEOs who, in their supreme confidence that Congress will see the error of their ways regarding additional Balanced Budget Amendment-styled cuts in funding, will not take any drastic action, and that when the dust has settled something akin to the status quo in healthcare will remain.  “They will have to,” one executive remarked.  “If they don’t, hundreds of U.S. hospitals will be forced to shut down.” 

New York Mets coach Yogi Berra at camera day 1969, Shea Stadium.

When I heard that, the words of New York Yankees’ great Yogi Berra came back to haunt me:   “It’s like deja-vu, all over again.”

In the mid-1980s, when healthcare was preparing for the transition from the familiar cost-based reimbursement system to DRGs and prospective payment, I heard a similar conversation.  Some hospital CEOs and board members, concerned with the financial impact prospective payment would have on their organizations, went to Washington to urge Congress and regulators to stop the silly experiment. 

They were met with profound push back. 

“We don’t care,” one frustrated Congressional aide for a powerful Texas Congressman told the group. “There are too many hospitals with too many beds and too many duplicate services, the majority of which are inefficient.  We can’t afford to subsidize poorly managed hospitals.” 

The Texas delegation was stunned. 

Whether he realized it or not, the young aide had summed up the views of many members of Congress at that time and, in the end, DRGs were implemented and hundreds of poorly managed and led hospitals did, in fact, close. Nearly 100 were located in Texas.

This time it will be different.  This time the nation’s financial problems are worse.

In the end, I turn to Yogi for more wisdom:

“The future ain’t what it used to be.”

© 2012 John Gregory Self

© 2019 John Gregory Self

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