Hospitals are Getting in to the Act

Arguably onsite clinics are proving to be the ultimate alternative to Obamacare and the logical solution to the inadequate yet most expensive health care system in the world. The casual and the detailed look at the robust 50 plus years data from the Centers for Medicare and Medicaid Services (CMS) proves what we all know but somehow ignore to expose.

The bulk of health expenditure "45%" is consumed by the hospitals mainly through emergency room visits and inpatient services as well as their hefty charges for ancillary services that can be provided at out patient clinics and centers at one third the cost.

Drugs, especially new ones, are expensive, but they consume less than 14% of the total health care expenditure. Yet new drugs and the great technological advances have been the main source of improving the health and longevity of our people. Hospitals are useful, but their overuse has been to the detriment of our patients and to the economic well being of our society. The loose criteria for hospitalization and the incentives in our system for patients to use emergency rooms and in hospital admissions have been the main culprit to the rise of the health care cost.

No wonder that aiming to lower emergency room visits and minimizing hospitalization through access to day to day care as well as proper chronic disease management has been the focus of the onsite clinics and successfully so. Patients don't have to wait for an appointment; they are seen the same day. The current long waiting period to see a doctor is a main reason for the exorbitant number of emergency room visits and high complication rate from chronic and acute illnesses.

In her book "Atlas Shrugged", Ayn Rand contends that in capitalism any project or business transaction or venture has to be a win- win scenario. While I don't disagree with her, winners are to be defined in economic terms. The ultimate players in the health care industry are the patients and those who pay for the services - "employers". Every one else involved is a surrogate to the process at best. Physicians and hospitals provide a service for a fee. In the ideal capitalistic world that business transaction should follow the normal rules of contacting, supply and demand and pay based on quality of service. There is a quasi contacting with no checks and balances, a lot of monopoly power and open ended checks to be written. Employers and patients pay as they go, no prospective or estimate, an open check. That has been the recipe for over utilization. On site clinics are reversing that unhealthy equation.

According to “Atlas Shrugged,” hospitals are losers in the On Site Clinics projects. But they lose because they have been winning unfairly, they have had the upper hand for a long time, while the employers and patients have been the unprotected underdogs. The onsite clinics are the protectors of the underdogs. At the same time physicians are the winners, they are able to practice medicine the way they learned in medical schools and indeed they get a more fair compensation. But the net is better access, better care, and better outcomes at a lower cost. No wonder then, the hospitals saw the writing on the wall, some one is infringing on their monopoly and their domain. Their knee jerk reaction is to get involved in the process and re spoil the pot. Unfortunately for them “the hospitals" it is kind of too late. Employers have become astute to the ails of the health care system. They know that hospitals are getting involved not as genuine partners with employers to do what is right medically and economically but to use their name and stance in the community as the place to "treat the sick" and make sure that they maintain the status quo. That status is defined as more hospital use, more over utilization and more testing. They know they have one of two options: either continue to find ways to fill the beds or take the pill and shape up to help build a health care system is better and more affordable.

Hospitals and their vast networks have one intention; gain a huge market share that guarantees optimal bed occupancy and robust emergency room visits. It is however too late, the plot is obvious to the CEOs and human resource directors at the work place. They know that the hound can’t be allowed to guard the chickens any more. The chickens have a watch dog, it is the onsite clinics. Clinics like the EHCS have defined goals, defined outcomes and certainly well defined cost, a cost that saves employers money yet provides unlimited access to their patients. That is a win-win scenario. As Lee Iacocca said "you either keep the pace or stay out of the way".