Hospital CEO Blames (almost) His Dog For Eating His Homework . . . I Mean Profits

In a quote qualitatively similar to “my dog ate my homework,” a hospital CEO blamed an “aggressive, direct competitor” for the downturn in his facility’s patient volume. The drop in business led to a significant financial loss, a staff layoff, and a near scrape with Chapter 11 bankruptcy.

It seems that the aggressive competitor’s “crime” was that it “funnel[s] health care dollars into other communities and away from [the hospital CEOs facility].” Literal translation: The competitor runs a more efficient business.

Wow, competition! That’s breaking news, huh?

Other than knowing that the CEO has an accountability issue, here are some takeaways for you:

1. Healthcare is a business, whether everyone likes that fact or not. Even the purest desire to deliver patient care doesn’t result in much benefit if there are no patients to care for.

2. Hospitals have spent billions “aligning” physicians to create systems that are more financially fragile. High overhead including bloated administrative costs make them more susceptible to failure and to failing big.

3. There’s competition in all aspect of business, including the hospital business and within the business of medical practice specialties. Competitors don’t give a [bleep] whether you fail, nor should they. You’re fooling yourself if you think that there’s something inherently wrong with a competitor poaching “your” business. It was never actually “yours.”

4. Is your practice or facility operated as an actual business? If not, then how can you expect it to be able to compete? Download a copy of The Medical Group Governance Matrix.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com

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