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:
- 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.
- 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.
- 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.”
- 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.
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Category: Governance