Last month I attended two different conferences related to healthcare; the California Rural Hospital Conference Symposium sponsored by California Hospital Association and the International Summit and Exposition on Health Facility Planning Design and Construction sponsored by the American Society of Healthcare Engineers. Each conference was unique, but there were also some very common themes between the two. Each conference held a CEO panel discussion regarding the challenges of the changing face of healthcare, particularly with healthcare reform. Both panels said without hesitation that Healthcare Reform was here to stay, regardless of whatever changes may be forthcoming by Congressional action. A bold, seemingly political statement some might think. But in truth, each panelist was really stating what should be obvious to most of us by now. The US healthcare system cannot continue under the current cost model. It is too expensive and something must change before it implodes. The message that I took away was not that we needed to ration care or lower malpractice claims. What I heard from the two distinguished panels, and have heard from my clients recently is that our healthcare organizations and providers must develop ways to do more with less. And that doesn't mean working harder or longer or cutting services. It means creating processes that provide value and eliminate waste. It means that our healthcare institutions must change to become something different than they are now. How do we get there?
One particularly interesting visual was a graph which illustrated reimbursement rates for Medicare and Medicaid which trended 10-20% below cost while reimbursements from private insurers trended to a whopping 40-45% over cost! Those of us with private insurance are funding the shortfall of state-sponsored insurance programs. So depending upon the payer mix of a healthcare organization's patient population, the financial prognosis could be fair to grim. But with more and more private payers using Medicare reimbursement levels as the basis of compensating providers for care, even those with a fair prognosis may soon be looking grim. This model for reimbursement looks like race to the bottom to me. Shockingly, however, one hospital CEO said that his hospital had learned how to make money on Medicare! What? That's heresy! But no, it is the new reality. This one hospital has developed a way to provide care for less. If one urban hospital can do it, surely it must be possible. The CEO did not divulge exactly how they managed to achieve such efficiencies, but having working with that client previously, I know that they are dedicated to continuous improvement and operating effectively.
So what can healthcare architects do with this information? As our clients change, so must we. We must seek to explore methodologies to help our clients examine their processes and design to support a new way of working. The cost of healthcare is not in the capital cost of buildings (although in California, that capital cost is not insignificant) but in the labor to deliver service. How we design impacts how care is delivered--pure, plain and simple. We can influence that. We can use our unique ability to address complex problems to develop solutions that meet the needs of all of the stakeholders--caregivers, patients, and families--that are cost effective in every sense of the word.
