Survival of the Leanest

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 - Candace Stuart - Headshot
Candace Stuart, Editor

As Medicare and third-party payor reimbursement are likely to continue to decline—especially with value-based purchasing slated to begin in 2013 under healthcare reform—hospitals will need to become more financially accountable, as well as take responsibility for patient satisfaction and quality.

However, the C-suite executives won't be the only healthcare professionals held responsible for this transformation. As hospital and private practice integration is becoming the norm, "employed physicians who have a stake in their hospital's

bottomline may find themselves working more [cost]-efficiently. They will now have an incentive to get by with less," explains John M. Mandrola, MD, an electrophysiologist of Baptist Medical Associates in Louisville, Ky.

In this month's issue, Mandrola and his partner, Thomas M. Tu, an interventional cardiologist at Baptist, discuss how conflicts of interest are scrutinized by the mainstream press and how relationships among physicians, medical societies and industry are changing along with the financial expectations of hospitals.

"Going forward, our system will be much more constrained by costs. In this way, U.S. healthcare is nearing the European model," Mandrola notes. "However, if less care is incentivized, who gets to decide which technologies constitute quality and which are superfluous?"

Similarly, in this month's cover story, Alexander A. Stratienko, MD, a cardiologist with Cardiac and Vascular Associates in Chattanooga, Tenn., asks: "If hospital administrators appropriately protect the profitability of the hospital, who will protect the medical interest of the patient when the two are in conflict?"

Most experts agree that "hospitals will need to redesign how they provide better care more efficiently and physicians will play a key role in this process," as Nathan S. Kaufman, managing director of Kaufman Strategic Advisors in San Diego, states.

However, whether this movement from a fee-for-service model will mean a push toward accountable care organizations, for which the federal government is advocating, or a risk-based model, where the hospital incurs expenses that relate to poorer quality, or if more hospitals will reject Medicare patients, remains to be seen.

Either way, hospitals' profits, even for high-volume specialt ies like cardiology, are going to lessen. If you have insight into this evolution of healthcare economics, please let us know.