While doing my research on hospitals in the U.S., I felt like one of the cartoon characters in my son's video game. The character, Mario, runs - no, trots - all over the place, jumping across brooks, over brick fences, on tiled rooftops. Hop-scotching on cobblestone roads, all the while evading weird-looking monsters trying to stop Mario dead on his tracks.
He is able to take evasive action and drops dozens of monsters and even when he sustains a direct hit, he manages to rise again and take flight, focused on a mission that he alone knows about. I don't know why he purposefully runs, or what the prize is at the end of his journey.
Eventually he is face-to-face with a tall brick wall. He can't scale it. He hurls his body against the wall. It won't budge. He considers going back, but the monsters are close on his tail. I stop the action.
I call my 11-year-old son. He comes over and shows me the way out of Mario's dilemma. Mario is able to escape once again and he is off running, er, trotting.
Researching the hospitals in the U.S. is a long journey into discovery. But each discovery leads to more questions, not answers. So you continue to do further research, which leads to still further research. You feel like Mario running for his life while focused on his destination. You feel like you're running for your life because you fear that you will arrive at a wrong conclusion and you will come up with a useless product.
The hospitals are supposed to be part of the solution to the health care mess the U.S. is in. Instead, it cries for itself solutions and answers.
Hospitals across the U.S. are losing money. One study shows that about a third of the hospitals across the country are in danger of closing their doors.
The other two-thirds would clearly benefit if the unprofitable hospitals do close their doors. Except many in the two-thirds-profitable category own many of the hospitals in the one-third-unprofitable category.
This of course is the short term conundrum. What are the long-term prospects for hospitals in this country?
I struggled with this question because the learned people in the industry are all over the place on this issue.
Hospitals are in trouble because of long-term trends and structural problems. These trends are permanent and call into question the hospitals' continued viability.
1. People are generally in better health at all age levels in the U.S. than their parents or grandparents because of more and better medicines. As a result, a smaller percentage of people is ending up in hospitals.
2. Americans are also living longer, postponing the end-of-life sicknesses that finally land them for longer-than-normal stays in hospitals.
3. Insurance companies, worried about their own bottom lines, are insisting on shorter hospital stays for maternity patients and all sorts of patients.
4. America has discovered the much-cheaper alternative of highly-skilled nurses going to patients' homes. Visiting nurses businesses have sprung up all over the landscape. America actually likes this better than traditional hospitals.
5. Many surgeries can be done on an outpatient basis, delighting the insurance companies.
6. The growth of the below-cost Medicare and Medicaid businesses that hospitals must accept has put tremendous pressure on hospitals to increase their prices charged to insurance companies. Insurance companies react by denying long hospital stays for their insured, further limiting hospitals' revenues.
7. America has discovered medical tourism. A major surgery costing up to $150,000 in the U.S. costs about $15,000 in India, Thailand or Malaysia, and the bill includes a one-week stay in a first-class hotel.
8. Hospitals are forced to purchase expensive new equipment to remain competitive. Industry continues to turn out new and better equipment at a torrid pace and hospitals are going into major debt to afford them.
Because of modern drugs and equipment that aid in detection of diseases at an early stage, Americans are living longer and are much healthier today.
The evidence is everywhere. Women in their sixties look like they are in their forties. Journalists are telling us that 50 is the new 40. MSNBC's Chris Matthews remarked, upon seeing Speaker of the House Nancy Pelosi celebrate her 70th birthday recently, that "70 is the new 40."
On I-15 in Las Vegas, there is a billboard for a Dr. Life, who is 78 years old and has the body of an Arnold Schwarzenegger at age 40. Doctors allied with Dr. Life and new-age doctors all across the country are predicting that the practice of medicine will slowly evolve into keeping people healthy, which will cause a decrease in the demand for sickness-curing patient care. That's a death knell for hospitals.
A relatively new company called Cenegenics, LLC, based in Las Vegas, is one of the firms in the new field of age management. Dr. Life is one of the doctor-licensees of Cenegenics, whose licensees are scattered all over the U.S.
The sad news for traditional hospitals is that their problems are structural and permanent and nearly impossible to scale, like that wall that always stumps Mario in my son's video game. But, like in the video game, the key to getting past that wall is to find the end-around passage. Hospitals must adapt and reinvent themselves, if they are to survive.
One ally of the hospitals is the epidemic of obesity in this country which will certainly take its toll eventually and will cause a temporary bump in business for hospitals - down the road, down Mario's road. But that is temporary, the long term trend by all accounts is that Americans are getting healthier.
What can hospitals do immediately to weather the triple-whammy of decreasing demand, decreasing money paid by insurance companies and increasing Medicare and Medicaid businesses that pay hospitals at below-cost rates?
They have to cut back, as many of them are doing. In Las Vegas and across the country, hospitals are cutting their staffs in a manner that mimics what is happening to the newspaper industry. A lot of pink slips are flying around these days because traditional hospitals are becoming obsolete, just as newspapers are being slowly replaced by cable news and the Internet.
While the outlook for hospital workers in the short run is not particularly encouraging, there is a projected huge demand for nurses and others in the medical field, with predictions for serious shortages across the country by the end of this decade. Nurses will be in great demand, though a smaller percentage of them will be working in hospitals.
How do all of these hospital problems relate to the health care reform?
It is clear that the health care reform legislation, which draws more than 30 million Americans into the insured pool, will cause an increase in hospital business. People who are allergic to hospitals because they can't afford them and not because they are not sick will of course avail of the hospitals' services and cause a modest increase in hospitals' revenues.
The sad part is that many of the new insured will be in either Medicaid or low-cost insurance policies that will not necessarily add to the hospitals' bottom line.
There will be plenty of work for the hospitals for a while, until the currently uninsured catch up with the general population in terms of general healthiness.
I can always count on my son to show me how Mario could go around that tall unscaleable wall. I can't ask him how hospitals can do an end-around. It may be too late in the day for some hospitals. The patients - now a third of the hospitals are the patients - may be too far gone in their ailments. Many of them cannot be saved.
The surviving hospitals - to no one's surprise - will of course be stronger financially and will serve Americans well as the country adapts to the conversion of the practice of medicine from curing diseases to maintaining patients' good health, helping them age gracefully and disease-free.
Oh, by the way, since hospitals must recoup some of their losses from serving Medicare and Medicaid patients, they will continue to charge outrageous fees for their services supplied to patients who are covered by private insurance. Hospital costs will remain high and will increase further, causing insurance companies to react by shortening hospital stays further. This will accelerate the growth of the visiting nurses businesses.
Only a single-payer system will solve the problem of high hospitalization costs because the single-payer - the national government - does not have to make a profit. It can absorb the increased hospitalization costs and not have to raise premiums, which private insurance companies must do to stay in business.
(Disclosure: My wife works for Cenegenics and both my wife and I own member units in Cenegenics, LLC.)
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