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Articles by Donald E. L. Johnson

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Last 25 years prove that little will change

By Donald E. L. Johnson

Health Care Strategic Management, July. 2001, Vol. 19, No. 7

Copyright 2001 by The Business Word Inc.

Although no one can predict with any certainty what the next 25 years will bring for hospitals, and it’s always dangerous to use the rearview mirror to foretell the future, I believe the last five to 25 years provide some pretty clear indications of what’s in store for the next three to five years.

Congress and the market will dictate changes in how hospitals and physicians are paid. This will change hospitals’ and physicians’ behavior. New drugs will increase costs and extend lives. Improved medical devices will continue to be replaced every three to 10 years, requiring massive capital. Hospitals will find ways to deliver services with fewer people. Nurses and physicians will resist and resent most changes proposed and imposed. Consumers will complain.

In 2026, we still will have nurses, physicians, acutely ill patients, hospital administrators, inpatient and outpatient care and frustrations with the health care delivery system.

The more things change, the more they stay the same, as some cliche-meister once coined.

This month marks my 25th year in health care journalism and my 37th in business journalism.

When I became editor of “Modern Healthcare” in July 1976, a group of Fortune 500 companies held a series of very public panel discussions about containing the cost of health insurance. So what’s new?

Large employers still are aggressively trying to contain health care costs, and will continue to do so as long as they pay most of their employees’ health care bills.

In 1983, Congress imposed a price- fixing system on hospitals in the form of Medicare’s prospective payment system. Price controls never work, and they have failed Medicare beneficiaries in every way by forcing them to accept less access to care and poorer quality. Sadly, politicians have gotten away with their betrayals of the sick.

HMOs and PPOs took over the health insurance market in the 1980s and 1990s under the pretext private-sector price controls would save money and improve quality.

They’ve proved they can’t “manage” care and keep customers happy.

I honestly don’t think we’ll have nationalized health insurance by 2006, but we might well have a new president and Congress elected on a platform of socialized medicine, even though it also always fails. A scary thought. Today, consumers trust providers and insurers far less than 25 years ago. This situation begs for hospitals and physicians to turn that around during the next five years.

CEOs were as anxious and at risk 25 years ago as they are today. And chances are pretty good that the job of a health system CEO will continue to be a tough one.

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