September 07, 2008
The business of health care faces some challenges other industries may never see. Try running a business when someone else can change prices on you even after you perform a service. Hospitals are seeing reimbursements from insurance companies either staying stagnant or dropping.
Joe Austin, CEO of North Fulton Regional Hospital, put declining reimbursements as one of the top three or four challenges in the business of health care.
"The reimbursement we might get from Aetna today to do an appendectomy might be the same as three or four years ago," he said.
But at the same time, the hospital has to give its employees raises to keep them. Supply costs continue to rise. So many products are based on oil, Austin said. And the generators any hospital needs to run all of its services in a natural disaster – think of Hurricane Katrina in New Orleans – use a lot of fuel. Technology also increases, adding more costs.
North Fulton Regional is not alone, he said.
"My health care story is not any different than any other industry," Austin said.
The second issue he faces, which also is an issue for metro Atlanta and the nation, is the increasing charity load for the hospital.
"The number of people that are uninsured continues to rise," he said.
The uninsured has two components: One is the true indigent patient, who does not have any funding as he or she does not have a job. More charity cases are coming from the second component.
"The largest rise we are seeing in health care industry is the working poor," he said.
These people have jobs and families, but are faces with a risky decision.
"They choose what they can afford to buy each month and they choose to gamble," Austin said.
What they gamble is that the family does not need health care.
"That's a tremendous burden for the entire health care industry," he said.
Another challenge to run the hospital business is finding people to work. Staffing continues to be a challenge, and today's lifestyles make it tougher.
"Do we see the same dedication to the long hours, the shift work as we did in days gone by? No," Austin said.
Today's employees have lifestyle needs and demand vacation, time off and certain shifts. That's a big challenge for a hospital.
"This hospital opened 25 years ago this October – once it opens it never closes," he said. "It's just a fact of life – we have to deal with that."
Those technological advances add their own challenges. Austin must work to make sure the hospital's capital funds keep it up to speed medically.
"Technology is a wonderful thing and it's saving lives every day. It is incredibly expensive to fund all the capital needs we have each year," he said.
The last challenge is the competitive nature of the business. All the hospitals in the area are trying to provide a very high quality service. All are raising health care standards here. Austin said he's all for more competition. For the consumer, it's a good thing because hopefully the hospitals will be more cost competitive. That will give the consumer a greater choice for health care.
"But from a business standpoint, there is so much competition in the market. Competition increases every day," he said. "It begins to thin out the number of patients that you have."
That in turn challenges the finances of the hospital that doesn't keep up.
"What drives that competition is good for the consumer. I think the quality of health care is going up," Austin said.
North Fulton Regional Hospital finished a $42 million expansion in 2007, expanding its surgical capacity in the process. That is an important part of the hospital's strategy. Leaders of the hospital created a vision that would make it a surgical hospital.
"By that I mean a hospital surgeons go to because it is very efficient, highest quality scores, very high outcomes, safe for patients and efficient," Austin said.
"Patients choose a hospital where doctors tell them to go. They basically are our partners in health care here," Austin said.
- www.northfulton.com
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