Capital Punishment for Health Systems?

The tea leaves are beginning to clearly point to a not-too-distant-future of downsizing and consolidation among acute care facilities.  ACOs, PCMHs, and other reforms are correctly aimed at keeping patients out of expensive acute care settings whenever possible.  Much effort, planning, and spending is going into the creation of the infrastructure (HIEs, data aggregation, analytics, etc.) needed to support these new payment models.  The capital investments are partly funded through HITECH (although, not for much longer), and by our health systems.  And, within the health system umbrella, the hospitals are the center of gravity for the capital, implementation resources, and experience needed to make the needed infrastructure a reality.

So, the side of the health care delivery system that provides much of the expensive (and often times unnecessary) care, is the side that can put the infrastructure in place to enable new payment models and reverse the upward spiral of healthcare costs.  Sounds like a plan.

There could be a painful rub, though – and, it’s about timing.   It could be that just when health system capital investments are at their peak – with the needed infrastructure half completed – is the time that health systems are feeling the big financial pinch of healthcare reform.  A big, continually building pinch, that is.  And not just today’s reform legislation, but my bet is on the many unfunded mandates to follow.  After all, the curve to be bent down is a big one.  And part of area under that smaller curve is heath system capital availability.

So the irony is that the nation’s hospitals will be building the infrastructure that will put them (at least partially) out of business.

But wait.  The health systems will offset this by buying primary care practices, right?  Maybe – but it will take a lot of primary care revenue to equal the revenue of one of ICU bed (which is not a bad thing – we want to keep people out of the ICU).  Or, maybe the demographics of the baby-boomer generation will increase overall patient volume and offset this calamitous trend?  Maybe a little, but I’m not sure if this changes my premise – I believe we’re going to get better and better at keeping people healthy and out of the health system.

So it’s back to the capital question.  A question that Divurgent professionals have given a lot of thought to and one for which we have some answers.

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