In one of the silliest of debates in the world of healthcare, challenging economic times and the inevitable cuts in reimbursement from healthcare reform and deficit reduction have fueled a renewal of the endless haggling over who is better: not-for-profit or investor-owned hospitals?

Let’s cut to the chase:  the winner is/will be those hospitals that achieve superior results in terms of quality, safety and patient satisfaction.  Who cares about the ownership structure?

I have worked in the healthcare industry for more than 30 years.   When I first went to work for Hermann Hospital in Houston as a young PR director and the first director of Life Flight in early 1976, there were actually more investor-owned hospitals in the market than the staid non-profit behemoths of tertiary care.  While the big tertiary care facilities that took care of the sickest patients were tax-exempt, the hard-charging investor-owned community facilities reshaped the market dynamics in terms of competition, the speed with which business decisions were made, and their ground-breaking efficiency.

Today, the pros and cons of which ownership model is superior are once again being debated.  The truth is that both ownership structures are fraught with weaknesses that healthcare reform and the ongoing deficit/debt reduction efforts will challenge.  

Who will win?  To borrow a line from the late Molly Ivins, a newspaper columnist who covered Texas politics for decades, “I am going to go out on a limb and tell you that I haven’t a clue.”  That said, I do know what will be the deciding factor.  Quality people.  Organizations that recruit and retain the best talent and who understand the consequences of the “new normal” and the lower rates of reimbursement, will end up on top.  If you do not hire and retain the best people, it is impossible to compete in a hyper-challenging financial/business model transformation.

Eventually, when the financial squeeze reaches painful levels, ownership structure will certainly come into play.  I think I know how it will play out, but that is a conversation for a different day. There are so many policy/reimbursement issues about which hospital CEOs have so little control   For now, if you are a hospital CEO, pay attention to the most important variable you can control:  the quality of people you hire and the rate of retention. That is one of the most important things you will do as THE leader.

© 2011 John Gregory Self