Hospital competition cranking costs

Unlike a lot of industries, competition doesn’t lower costs in healthcare. As hospitals calculate the revenue potential for each area of service, many of them–some of them serving the same group of constituents–rush to buy the right equipment, attract the right practitioners, create the marketing materials and the advertising blitz, even expand facilities, and so on. And the cost of healthcare–already a source of shame for our country–jacks itself up even higher.

In enlightened Oregon, legislators are considering a bill that “would require hospitals to demonstrate a need for offering a new service to avoid wasteful duplication and to rein in the cost of health care.”

How many oncology or cardiology departments do we need in a single county? First we need to know how many cancer patients it takes to support a single operation in a year–and then how many cancer patients the county has. Simple math–that unfortunately has little to no effect on the reasoning that gets hospitals taking the “me, too” approach to services. And patients suffer because procedures performed by doctors who don’t get to do them very often are often more dangerous.

What’s the answer? Sharing? Partnering? Having a centralized service for referrals? But then there’s that old political game that kicks into high gear. Answers are easy to come up with–they’re just hard to execute. After all, we’re dealing with fear–the fear of not having enough. It’s a powerful force.