Exploring Human Potential

Hospital Obsolescence or Hospital Reinvention?

Posted on | March 8, 2018 | No Comments

Mike Magee

Two weeks ago Zeke Emanuel asked the question “Are hospitals becoming obsolete?” In his New York Times Op-Ed he flagged the high water mark for the industry as 1981, a year when 6,933 hospitals nationwide admitted 39 million patients or 171 for every 1000 Americans. Thirty five years later, our population has grown 40%, and numbers of hospitals have declined by 20%, with those remaining functioning at 65% occupancy rates.

The industry consumes roughly a third of our national health care spend at $1.1 trillion. And all the while we’re treated to scandalous stories like the one in the Washington Post this past October titled “A hospital threw a still born out with dirty laundry.” The 98,000 deaths attributed to hospital error in 1999 have now grown by some estimates to 440,000. And as whipsawed hospital CEO’s like Geisinger’s David Fineberg recently proclaimed, “We should be investing in people and processes, not hospitals.”

Having spent a few years running hospitals myself, I understand the challenges and complexity. They play a critical stabilizing role in their communities, have a mixed governance model that can be confusing, struggle with continuously aging brick and mortar, support 24/7 coverage expectations, deal with incessant demands for expensive technology, and maintain complex, diverse workforces.

Health care is the largest employer in America, and labor accounts for half the total cost of health service delivery in the U.S. But increasingly the workforce is clerical with 16 positions for every one physician, and half of those 16 being non-clinical. They are also flowing outpatient and home-based where, according to Johns Hopkins geriatrician, Bruce Leff, care for some conditions normally treated in hospitals can now be accomplished at home with a 30% to 50% savings and many fewer complications.

Leff predicts hospitals like his will soon morph into “large intensive care units” or (like Columbia Presbyterian) become indistinguishable from corporate research enterprises on the prowl for NIH grants and pots of patent gold. Of course, training primary care doctors in academic centers like these has been recognized as problematic for some time. So as care moves outpatient, primary care training will need to as well.

Hospitals like New York’s Mount Sinai have moved vertically downstream establishing their own hospital-at-home product called “HaH-plus”. Their mobile acute care team thinks they can save Medicare money, and that as many as a half million Medicare patients could qualify at a savings of 20% for Medicare.

Other hospitals are done with massive edifices and instead are building two or three story “healthplex” complexes following the lead of the hotel industry that has gone boutique and in a short two decades created easy to use, low cost lodging options with a skinny labor profile.  The new skinny hospital menu of services will likely include emergency care, labor&delivery, some surgery, lab and radiology.

Repurposing old hospitals with their wide hallways and broad walled rooms has been problematic all along. Not only are they difficult to redesign, but their outmoded HVAC, poor access, and disintegrating construction often beg for dismantling. Some – like the old factories they resemble – do survive for mental health services, addiction services, and a range of local governmental uses.

But in the end form must follow function. And demographic changes, technologic progress, and the proven risks of being a traditional hospital in-patient in the modern age suggest evolving functionality with more mobile, segregated, targeted and personalized forms of care will dominate the immediate hospital horizon.


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