Hospital-Centric Healthcare

How the Hospital Cut the Stipend and Lost a Bundle

September 26, 2011

The marketplace for hospital based services is becoming increasingly commoditized.

Along with it, we’re seeing the growth of large commodity providers with a commodity type business plan:  Provide the level of service that is minimally required.  Provide that service through low cost providers in order to upstream the profits.  Make money on volume.

The selling point to facilities is low to no stipend support.  After all, from the hospital standpoint, isn’t low or no stipend support a cost saving deal?

Maybe.  Maybe not.  You often get what you pay for.

You can buy a cheap pair of dress shoes that will crack and wear out in a year or you can buy shoes with an initial high price tag with much more supple leather and better craftsmanship that will last, with upkeep, more than a decade.  Which pair was actually less expensive?

In similar fashion, is it less expensive to reduce a stipend by $300,000 but to lose $1,000,000 through the destruction of O.R. efficiency or the skyrocketing increase in hospital negligence litigation?

Perhaps this issue won’t play out in the court of public opinion but in the court of law?

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