Thursday, April 30, 2015

Cost and Culture

I like aphorisms and one of my favorites is this – no hospital administrator ever got his portrait in the lobby for saving money.

That one has been apt for a long time and still is, but things seem to be changing.  Here are a couple of quotes from an editorial that appeared in the March 16 issue of Modern Healthcare:

“Over the past two years, conventional wisdom presumed without offering much in the way of evidence that the lingering recession and the rise of high-deductible and narrow network plans explained the slowdown of healthcare spending, now in its fifth year.”

“Indeed, most economists and the media echo chamber repeatedly said rapid spending growth would resume once the economy picked up steam.”

“But now, finally, the Mr. Joneses at the Congressional Budget Office have come around to admitting that something is happening here, even if they don’t know what it is.”

One possibility is that there has been a shift in the culture.  Somehow, public concern about cost, the inclusion in Obamacare legislation of cost-reduction measures, more aggressive tactics by insurance companies, the growth of so-called value based payment mechanisms and other factors seems to have made it acceptable for management to be more aggressive in pursuing cost reduction measures, even when that gores somebody’s ox.

Culture is a powerful thing and may someday even get a cost-reducing administrator’s portrait in the lobby.

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