HFMA VIEWS

Scott MacStravic, Ph.D.

There are many “Catch-22s” in personal lives as well as organization strategies. The original one from the novel of the same name involved the insurmountable obstacle that if flyers in WWII wished to avoid dangerous missions by claiming they were mentally unfit to fly, their very act of asking to be excused proved they were not crazy, and disqualified them from being excused on that ground. In other words, the only way they could get out of flying was to ask to be excused, but by asking, they made the excuse non-credible.

Proactive health investments carry with them a number of significant positive promises. They can:

• Reduce providers’ operating costs by making employees healthier and thereby reducing lost productivity as well as sickness, disability and workers compensation costs
• Reduce staff shortages by increasing the average productivity of workers
• Generate new revenues through marketing proactive health services to self-paying consumers, insurers, government insurance programs – and particularly to employers who can save the same kinds of operating costs as providers can
• Improve community health and thereby enhance providers’ mission and values fulfillment, generate positive PR and strengthen tax-exemption eligibility, where applicable
• Reduce the sickness care burden on employers, who are increasingly cutting or dropping entirely their health insurance coverage for workers, and increasing the numbers of uninsured sick patients that providers have to deal with and collect from
• Reduce the sickness care burden on society that is increasing calls for and examples of single-payer, government-financed systems that will likely be no more generous to providers than are Medicare and Medicaid
• Reduce the growing sickness care demand that is forcing providers to invest in new or expanded facilities, while their probability of such investments paying off in greater financial health is dim

But the Catch-22 in this case is that proactive health investments will inevitably decrease the population’s need, demand and expenditures for sickness care. Since sickness care is the primary, almost sole source of revenue for most providers, especially hospitals and secondary or tertiary specialty physicians, it threatens the viability of their current investments.

Moreover, any hospitals that invest in efforts that threaten the livelihood of specialists upon whose referrals they depend are likely to see further reductions in their sickness care volume and revenue. Hospitals are already feeling the impacts of specialty physician’s anger over lack of control and satisfactory relationships with hospitals as unhappy physicians invest in their own competing facilities. This may pale by comparison if hospitals make investments that reduce demand for the very services these physicians rely on for their livelihood.

So in many ways, hospitals and physicians can be damned if they do and damned if they don’t invest in the proactive health efforts already being pushed by all third party payers, as well as many health care reformers. The choices available amount to joining in an effort that promises positive returns for payers and consumers alike, while a mixed bag for providers, or waiting for other kinds of providers to serve the rapidly increasing proactive health market and suffering the resulting declines in sickness care volume and revenue with no mitigation from being part of this new market. It’s definitely a Catch-22.