Letters to the Editor
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‘9 Hospitals Proposed for Closing’
Given the significant number of hospitals which have been on “life support” for years, if not decades, it is a miracle that the government has finally decided to do what should have been done long ago — close some of the least competitive hospitals in greater New York [New York, “9 Hospitals Proposed for Closing,” November 28, 2006].
Many hospitals in our city have not been able to compete in this highly competitive market for a variety of reasons: 1) inadequate managed care and governmental reimbursements, 2) high operating costs (wages, rent, utilities), and 3) antiquated infrastructure. The government, by allowing less competitive hospitals to incur ongoing massive operating deficits, has contributed to — if not caused — the secondary damage to many of the other hospitals that don’t run deficits. The more competitive hospitals have been forced to accept inadequate, almost repugnant, managed-care contracts and governmental reimbursements simply because the hospital down the street accepted it.
Instead of insisting on balanced budgets by all hospitals, the government has effectively allowed the less competitive hospitals to drag down the more competitive hospitals. Quite simply, when the financial management of hospitals is dictated by the government rather than by the market, revenues are compromised and swallowed by inefficiency. In the same fashion, reimbursements to physicians are dictated by the government with the same secondary inefficiencies. This is a poor business model in any industry.
Furthermore, because the antiquated infrastructure at many of the less competitive hospitals competes for capital, it effectively denies capital to fund infrastructure improvements at the competitive hospitals.
In sum, by allowing the less competitive hospitals to deny and conceal their lack of competitiveness, we allow them to parasitize their competitors — ultimately weakening the entire hospital system.
Hospitals are multimillion-dollar, if not billion-dollar, a year businesses. They should compete equally with each other. The government and the politicians who currently drive this process should not meddle in their affairs and should certainly not prop them up. This will force hospitals to think competitively and to acknowledge their strengths and weaknesses and to adjust their business plans accordingly. Businesses and hospitals cannot be all things to all people and should bolster their strengths and amputate their weaknesses. The city and its citizens don’t need every type of specialized care in every hospital. Instead, hospitals should focus on selective areas of expertise and need and commit their capital and resources so as to provide the best and most efficient service in their chosen areas of expertise. This will encourage them to compete in the areas where they can and refer in areas where they cannot. The government, the politicians, the hospital administrators, and the community all need to acknowledge this common sense truth sooner rather than later.
ALLAN INGLIS
New York, N.Y.
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