Monday, May 28, 2007

Business or Ministry?

Redesigning our health care system would be easier if we could decide whether health care is a business or a ministry.

When I began my career over 50 years ago, health care was a ministry – no doubt about it. That was why religious organizations had played such a large role in it. In 1965, it was the logic behind Medicare reimbursing hospitals their actual cost of providing services. It hadn’t occurred to anybody that the system could spend too much money or have the capacity to provide more health care than we needed.

Considering health care as ministry has implications. One is that it ought to be encouraged and supported, not stifled by things like government regulation. Another is that it would be vulgar to subject it to market forces like competition. Still another is that the people who provide it are somehow noble, above the level of ordinary people.

That point of view still prevails to a considerable extent. The May 14, 2007 issue of Modern Healthcare featured Ascension Health, a Catholic, 61-hospital system based in St. Louis. Its annual operating revenue was $11.4 billion in 2006, more than that of Amazon.com or Google or Southwest Airlines. Its operating margin was 4.2%.

Anthony Tersigni, Ascension’s president and CEO, was quoted in the article as saying “We are a ministry. We’re not a business. We do use business practices for one basic reason: We have bondholders who are counting on us to repay the bonds.”

To say that an eleven billion dollar operation with nearly a half billion in profits is not a business stretches the language. On the other hand, it is no doubt true that Ascension’s leadership believes that doing good is its basic mission.

Maybe we are being trapped by labels. Maybe Ascension is both a ministry and a business. Maybe we should be glad that Ascension believes in its mission of ministry. But at the same time, maybe we have a right to be interested in how it is managing that eleven billion dollar business.

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