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The Best US hospitals are the best in the world

Hospitals:  an overall perspective

Historically the strengths of hospitals was the shared capital, shared admin and facilities, close proximity for doctors, etc.   Focused competitors including ambulance service, diagnostic centers, etc.  have access to tremendous amounts of capital, and can offer their services at lower cost with better quality.   Payers are using IT to collect and examine the data on cost and quality. 

The best hospitals in America are the best in the world.  Five hospitals in the U.S. do more clinical trials than any entire country in Europe.

Hospitals need to rethink their basic model:  emphasize excellence in a more limited set of services under new business units.  Improve also payment systems.  the current business conditions however have lead to 70% of hospitals in America being non-profit.   This is a significant stat, and enforces the idea that hospitals are not a great profit center.  There are numerous reports of hospitals closing all around the country.  McKinsey writes how to transform the hospitals in this country.

Current co-pay has risen to $28.8B in 2005.   Hospitals collect from private clients only 50-60% of the balance due.  Perhaps they should offer low interest loan packages as they walk in the door. 

Also only 2% of their total revenue comes directly from patients.  So almost all of their revenue is from third parties. 

Is there enough business acumen being developed from within, to run better hospitals?  Kaiser, which has much better statistics than the IHS in England, has a very strong management model.   Its website promotes preventive care.   It also tries to make its patients aware of the cost of various services, even though one can argue that there are few incentives to do so.  Cleveland Clinic and Mayo use a model that is well managed and extendable. 

Administrators, an example is the CEO of Stanford, Martha Marsh, as the following background of being a insider in the HC industry:

Prior to her work at UC-Davis, Marsh served as senior vice president for professional services and managed care and before that, as vice president for managed care at the University of Pennsylvania Health System in Philadelphia.

From 1986 to 1994, Marsh was president and CEO of the Matthew Thornton Health Plan, a multi-state health maintenance organization affiliated with the Dartmouth-Hitchcock Medical Center in New Hampshire. Her other health-care experience includes seven years in various managerial positions at Elliot Hospital in New Hampshire and experience as a senior health-care analyst with Arthur Anderson & Co. in New York.

Marsh is a graduate of the University of Rochester and received her MPH and MBA degrees from Columbia University.

One model is to compensate doctors on the basis of metrics using quality, cost, and service.  Example is a hospital that used such a incentive system.   Results were outstanding.  It is even a desired place to work by doctors.  

Could also set up joint ventures, giving doctors a part ownership stake.   There are laws however that restrict self referral of services for Medicate and Medicaid patients.  

Tenet Healthcare:  publically traded hospital chain, 100 metrics used, identify areas of improvement and find ways to achieve them.  Results are they are the best.