Wednesday, June 09, 2004

How should hospitals be ran

This is an interesting article that deals with the health care model.

"Devereaux and colleagues earlier showed that for-profit hospitals had higher death rates."

Really, is that because they are taking riskier cases with money willing to pay, or because for profit is the incorrect model for health care.

"The reality is that for-profits face significant economic challenges. The first is they have to generate revenues that will satisfy shareholders," Devereaux said.

"Second, they have high executive bonuses. Thirdly, they are very top-heavy and have high administrative costs. Also, they have to pay taxes. That is a lot of extra money that they have to come up with," Devereaux added.

I will agree with the first statement.
On the second statement bonuses are optional and are normally given when businesses do well. Additionally, the bonuses will only be a small fraction of the total operating cost of the hospital, and I doubt that will seriously affect the bottom line much.

On the third point, I don't see how that will be different from a not for profit business, if the business process are the same the administrative costs should be the same.

Actually, yea I do, you would pay the people less because you are running a not for profit business and people should be helping out of the goodness of their heart. Except that given that the baby boomer generation that is coming up (you had better marry a nurse if you want to find on when you need it), you want be able to find enough people to fill low wage, I just want to save the world positions.

On the fourth point, I will concede that for profit hospitals have to pay taxes, but we could easily change that fact (make a law about it) and the damn socialist would say that we are giving the huge corporations money.

Himmelstein pointed to fraud cases involving for-profit health care companies including Columbia/HCA Healthcare Corp. , which was hit by a Medicare scandal in 1997; Tenet Healthcare Corp., which is being investigated for allegedly overbilling Medicare; and HealthSouth , where 15 former executives have pleaded guilty to criminal fraud charges.

What and you can't find an example of a not for profit fraud.

I think the article is interesting, and will agree that this option needs to be looked at, but you will also need a few hundred studies without an agenda, which this one seems to have more of an agenda than useful information.


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