The Current Hospital Industry
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Health care is one of the fastest rising expenses faced by American families. Every year, health care expenses rise faster than either consumers' incomes or the general rate of inflation. It would seem, then, that health care providers of which hospitals are the most conspicuous institutional component would be a highly lucrative enterprise. In fact, however, hospitals have found the late 1980s to be a difficult period, with conditions improving only slightly at the beginning of the 1990s. Hospitals typically earn a margin over expenses of about one percent on their general patient population. Over a third of hospital beds are empty at any one time (Hamilton, 1989). While the rising population of the aged means an increasing supply of patients, a greater proportion of these are low revenue Medicare cases, rather than the more profitable private payer patients (Fritz, 1989). In response to their problems, hospitals have tightened management (Siler, 1990), aggressively marketed specialized services such as drug addiction treatment, and even branched out into nonhospital services, e.g., running a catering business out of the food service operation (Paris, 1989). Nevertheless, the hospital business remains a tough one, confronted by powerful and conflicting competitive and regulatory pressures (Garland and Smart, 1989). To understand the economic problems and choices facing hospitals, it is useful to regard them as firms, and apply t
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int of the ultimate consumer, the patient, this meant minimal control over the care service provided. Within broad limits, it didn't matter whether a patient liked a particular hospital, or would rather go to some other one. The doctor made the decision. A doctor might have standing at several hospitals, and therefore be able to accommodate patients to some degree. However, the decision was essentially still the physician's, so it was the physician that hospitals had to pursue as customers.
It might fairly be said that the physician was in a better position to make an informed choice than the prospective patient. The patient could judge how well the hospital performed as a hotel, but could he or she really judge the medical skills of nurses, for example, as apart from their bedside manners? The physician would be familiar with the strength and weakness of hospital staffs, indeed of individual staff members, and of the availability of facilities.
Traditional physicians were self employed professionals, individual for profit entrepreneurs. Since they did not pay for the use of hospital staff and facilities (these being billed to the patient) cost was a concern only the degree that they might lose patients
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Some common words found in the essay are:
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Approximate Word count = 1579
Approximate Pages = 6 (250 words per page)
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