Community hospitals shouldn't complain about Steward

An important reason that medical costs are so high in Massachusetts is that residents are accustomed to visiting major teaching hospitals for routine care. The big academic centers, especially the Harvard-affiliated hospitals, have been masterful in persuading people that there is no worthy substitute. They’ve done a great job of branding and investing in facilities –and of course they really are excellent places to obtain care.

Community hospitals in Massachusetts have long complained about the power of these big systems, and have gotten worked up as Partners HealthCare in particular has expanded into the suburbs. Employers and health plans have generally been sympathetic to community hospitals –because Partners’ expansion means higher costs for them.

Community hospitals have a strong story to tell, especially in an era of cost-consciousness and transparency. Their clinical quality is typically comparable to the teaching hospitals’, locations are more convenient, level of personalized service is relatively strong, and costs are lower.  Community hospitals could also do more to learn from one another’s experience by sharing information with one another more freely than is done now.

But in general community hospitals in Massachusetts have not taken the initiative to exploit their competitive advantage. That’s why I’m grateful that private equity backed Steward Health Care System has seized the opportunity to create a cost-effective, high quality, high service offering that can thrive in the marketplace. Not surprisingly Steward is now taking heat from other community hospitals, who are whining to the Attorney General (failed Senate candidate Martha Coakley)  about “apparent predatory practices against community hospitals” –in this case related to Steward’s move to ally with a group of physicians, Whittier IPA.

As is often the case with groups running to the government or media to seek special protection, community hospitals are trying to argue that Steward is harming the public –when the real concern is that Steward is eating their lunch through competition. I’m glad to see a profit-maximizing entity such as Steward come in and take on the market opportunity aggressively. And I agree with the sentiment expressed by Steward in the Globe:

“This letter seems to be saying a system of 10 community hospitals is damaging community health care, which is our own business,’’ [Steward] said. “Without us buying these hospitals, most, if not all of them, would have failed or closed. We’re out there as a business saving community hospitals and keeping patients in the community.’’

Don’t be fooled by community hospitals ranting against big bad capitalists. The important objective for the public interest is not the comfort of traditional community hospitals but the ability to finally bring the costs of health care under control in this state.

December 6, 2011

3 thoughts on “Community hospitals shouldn't complain about Steward”

  1. As the daughter of a nurse who has worked for hospitals in MA for 40+ years, this is the most ridiculous, inane justification I have ever heard for Stewart Health Care’s ruthless unrelenting mission to suck all the profit out of the Caritas Christi hospitals. Steward Health Care is going to find a way to minimize the cost of running these hospitals, regardless of the quality of patient care and/or standards of reasonable staffing and compensation and when there is nothing left but the bare minimum of any kind of health service, Stewart will sell these institutions to another company, who will then have to take on the task and cost of actually making them functional once again.

    I can’t say I’m surprised at a businessman’s interpretation of this situation, but in a health care institution that others rely on for quality care and sufficient staffing, cost cutting can only go so far before the patients and staff both suffer. Nurses cannot be expected to take on the responsibilities of the doctors, the housekeeping staff, patient transport, the maintenance department and secretarial staff in addition to their own duties of patient care and comfort when management is constantly cutting the work force. And to even suggest that the actual nurses (not nurse managers, etc.) are overpaid for the work that they have to do is a joke, especially when such a statement is made by someone who has never worked in the profession and spends their days at their desk in an office. Until you have first hand experience of what it is like to work in those situations and understand the constant work that goes into caring for others, you have no place at all to criticize their “whining” to the Attorney General for the unethical profit-mongering actions of Steward Health Care. You should be ashamed of yourself.

  2. So glad to see the common denominator of healthcare reform has not dissolved the age old tension between labor and management.

    I won’t even begin to comment as if I have expertise on either side. However, there are few other industries that are as regulated and scrutinized as healthcare providers.

    The American public has decided the market approach for creating avenues for health care is preferred to a government run program. The very nature of the business necessitates highly specialized occupations on both sides of the business model.

    But until the government takes over hospital management, in addition to telling them how to perform, labor is going to have to negotiate with management at the bargaining table and leave management to the executives. Perhaps, someday, labor will be a partner in hospital management, but the current business model and climate doesn’t allow it.

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