Exploring Human Potential

The House of God Has Become a House of Cards.

Posted on | April 2, 2020 | No Comments

Mike Magee

In a career that included exposure to every level of America’s vast and collusive Medical Industrial Complex, I spent nearly two decades enmeshed in the senior management of hospitals.  These ranged from a 90 bed rural hospital just south of Brattleboro, VT, to the prestigious and historic Pennsylvania Hospital in Philadelphia, the nation’s 1st hospital.

From this experience, I take no pleasure in reporting that “The House of God” is a “House of Cards” in the process of crumbling under the weight of the Covid-19 pandemic.

As I lay out in my book, “Code Blue: Inside the Medical Industrial Complex”, as of 2018, there were 5,534 hospitals in the United States, 87 percent of which are designated as community hospitals. These provide close to 90 percent of the nation’s hospital beds and handle 92 percent of the admissions. Only 430 hospital institutions are designated as academic medical centers.

They are a disparate group of institutions, disorganized among themselves, some for-profit, some non-profit, sharing only one thing in common – extreme variability.

As the 2016 New York Times headline blared, “Go To The Wrong Hospital and You’re 3 Times More Likely to Die.” The article was reporting the findings of a PLOS One study that examined 22 million hospital admissions and found that a trip to the “wrong hospital” versus the “right hospital” assured a 3 times greater chance of death and a 13 times greater chance of complications during hospitalization.

Not surprisingly, the “system” is also marked by wide variance in financial stability. Take the case of Detroit and Southeast Michagan’s Beaumont Health System, which operates an 8-hospital system. It’s daily operating costs under normal circumstances are $12 million. It’s reserves to survive 200 days seemed more than enough. But since halting all elected procedures with the crisis, they expect loses of $70 million a month.

Covid-19 is a triple whammy for these institutions. First, they lose lucrative elective surgeries in return for lower Medicare reimbursement for elderly pandemic ICU patients. Second, their outpatient office visit revenue (roughly 50% of doctors now work for hospital systems) is all but shut down by the crisis. And finally, the material costs of medical supplies, rampant with hoarding and profiteering, and absent any federal planning or guidance, are skyrocketing.

Strangely, paying more doesn’t get you more. In a RAND sponsored survey this week, 73% of physicians nationwide say they are unable to quickly and easily access Covid-19 testing.

While hospitals may not be able to access testing, there is one resource they can purchase at a moment’s notice – a Washington lobbyist. The firms are hiring as fast as they can. As one company ad streamed out this week, we are “uniquely positioned to help our clients navigate these uncharted waters and the uncertainty that abounds.”

The federal relief package just approved includes $100 billion for hospitals. But how and when you get that money remains a mystery. And time is not on the hospitals side with new projections of a pandemic peak still 4 to six weeks away.

If and when these cards come crashing down, it will left to President Trump and Vice President Pence to explain how the vaulted free enterprise system allowed the House of God to become a House of Cards.


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