A glut of hospitals

December 15, 1993|By I. Donald Snook Jr.

AS THEY struggle to overhaul the nation's health care system, politicians and planners are missing the real issue.

Just as you don't build on a weak foundation, you can't reform a system without making sure that its underpinnings are strong. The weakness in today's health-care system? Too many hospitals and too many beds.

Hospitals average only 65 percent occupancy on any night. Unless something is done about this oversupply, no "reform" will fix the cost crisis.

The solution needs to be decisive: Close as many as 30 percent of the nation's hospitals. Is this possible? Yes, if we understand how we arrived at this situation.

After World War II, because so many servicemen were returning and because of new medical techniques and technologies, the demand for hospitals rose sharply.

In 1946, the government responded with the Hill-Burton Act, which provided federal support for hospital construction and modernization. By 1950, some 500 new hospitals had opened; by 1970, some 1,400. Hospital admissions doubled and then tripled through 1980.

In the '80s, because of better technology and changes in attitude and practice that meant fewer and shorter hospital stays, the trend began to reverse. Year after year, hospital admissions went down.

In 1982 the average occupancy was 76 percent. Three years later, it had gone down 10 percentage points -- that is, 3 million fewer admissions. Today, the emphasis is on shorter stays and more outpatient procedures. The hospital bed is no longer an indicator of the effectiveness of the health care system, but it has become an entrenched part of the system -- as much a problem as a solution.

Hospitals are costly, whether busy or not. There are tremendous overhead expenses for services -- emergency rooms, operating suites, labs -- that must be staffed and equipped around the clock.

If we do nothing to alter this overcapacity before we institute reforms, no new system will decrease expenses. Voluntary mergers may be a step in the right direction, but only if one ceases to be an inpatient hospital.

So let's reverse the Hill-Burton strategy. Hospitals should be closed systematically, with the same rational planning and financing that the government put into building them.

The government should buy out hospitals, not just shut them. It should compensate hospitals fairly for getting out of the inpatient business, but with strings attached. The buy-out money would have to be reinvested in community health needs: drug addiction, infant mortality, AIDS, Alzheimer's disease. Money tied up in buildings and technology could better be used for halfway houses, prenatal clinics, hospices and home care.

I am not suggesting that we nationalize health services or that the government run the new health care entities.

But I do believe that it can lead the task of retooling the system; witness how quickly it has mobilized to fight a war or reduce the military at the end of one.

There is no painless, easy way to reform the health-care system. But reversing Hill-Burton would lead to a dignified, orderly rebuilding.

Hospitals and the people who depend on them deserve no less.

I. Donald Snook Jr. is chief executive officer of Presbyterian Medical Center of Philadelphia.

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