The Reality of the Business of Health Care
Posted by Lin Dworshak on Fri, Jul 22, 2011 @ 10:28 AM
"After a lifetime in the business world my post-retirement work has been in the health care environment and I am amazed at the un-businesslike practices I have observed. I could rant for a page or two about percentages, budgeting, write-offs and stuff, but cutting to the chase my impression of what passes for “billing” is “throw a bunch of sh** against the wall, see what sticks, and write off the rest.” It makes my head swim to think about it. From what I have seen, the quality of healthcare is tolerably okay but the business aspect is an economic train wreck."
This quote from a recent health-care blog in the Wall Street Journal sums up how far from legitimate business principles current health care business interests really are. There are many factors that have influenced this non-business approach to health care billing; not the least of which is the idea that patients with employee based insurance are not really paying for services and the insurance companied that are have really deep pockets.
In the past, hospitals and providers could well afford to collect the easy dollars and write off the rest. That era of not having to confront the real problems with the current health care environment has come to a screeching halt.
In the past, the expectation of longevity of employment was taken for granted. In the current market place, employees have become much more mobile going from opportunity to opportunity often crossing the country from one coast to the other. And with that mobility, employee based insurances have become at risk.
The rising cost of health care is the subject of much debate and if you listen closely, there appears to be only two solutions. (1) a single payer system or (2) go back to the drawing board.
Meanwhile, back at the ranch, physicians are more and more aligning with hospitals as hospitals are going to be the only ones who can truly meet the demand and afford the ACO model.
The problem is hospitals are ill-equipped to handle the vastly different provider billing world and hence the "train wreck".
Those practices that have a clear handle on their billing processes and are thriving would do well to "ride out the storm". If history has taught us anything, it has taught us that over-reacting to current events may influence the stock market, but does not have to influence strong business practices.
A practice that has strong ties to the community, a good balance sheet, excellent business principles, strong leadership and a strong strategic plan can and will weather the storm and set the pace for other practices to follow.