A big problem with changing the focus of healthcare in the United States is that hospital chief executive officers (CEOs) are incented to produce profits for their institutions.
This chart from Kaiser Health News shows that the goals for most of the CEOs of major hospitals and health systems are profits. Growth and more specifically, admissions growth, are also mentioned.
It also lists CEO compensation figures, which are quite impressive. In addition to their hefty salaries, most CEOs also command large performance bonuses based on meeting financial goals.
According to Becker’s Hospital Review, CEO pay has risen over 4% per year since 2009 with an increase of 4.8% this year.
The current rate of inflation in the United States is about as low as it gets, 1%.
All this in the era of the $546 charge for 6 liters of saltwater, the $500 charge per suture for a facial laceration, and the $73,002 charge for an emergency department visit for a urinary tract infection.
If you were a hospital CEO, why would you want to emphasize preventive care and outpatient services when your bonus is tied to profits, admissions, and growth?
Everyone is entitled to make a living, and for sure most doctors do very well. But doctors are being squeezed on many fronts—declining reimbursements, need to purchase expensive and time-sucking electronic medical records software, dealing with more ICD codes, and rising overheads to name a few.
No one has a clue about the effects of the Affordable Care Act on physician practices, but it’s unlikely that reimbursements will rise.
Doctors are being forced to sell their practices to hospitals. Once the majority of physicians become hospital employees, their incomes will no doubt be squeezed further.
The public is demanding more accountability and transparency from hospitals and more emphasis on keeping people well rather than treating the sick.
Don’t fall for things like this story of a hospital sponsoring a “Guys Night Out” to watch Monday Night Football either. In addition to the game telecast and free sandwiches, the hospital offered free PSA tests. While this seems altruistic, it is really a way to drum up business. I wonder if the men were fully informed of the risks and benefits of having a PSA drawn?
Yes, those who run hospitals have no reason to stress wellness. Profits result from keeping the beds full, not empty.
Don’t look for things to change soon.
Skeptical Scalpel is a recently retired surgeon and was a surgical department chairman and residency program director for many years. He is board-certified in general surgery and a surgical sub-specialty and has re-certified in both several times. For the last three years, he has been blogging at SkepticalScalpel.blogspot.com and tweeting as @SkepticScalpel. His blog averages over 1200 page views per day, and he has over 7600 followers on Twitter.