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Wednesday, December 31, 2008

Even businesses admit healthcare competition is sick

Posted By on Wed, Dec 31, 2008 at 9:58 AM

Worth a look is this op-ed piece in today's Post-Gazette. Writer M. Christine Whipple, head of the Pittsburgh Business Group on Health, asks whether UPMC really needs to build a new hospital in Monroeville. Whipple notes that the facility would be built near Forbes Regional, an existing (and recently improved) factility operated by UPMC rival West Penn Allegheny Health System. 

Whipple's key contention:

Service duplication virtually ensures increased health-care costs. Instead of one emergency department adequately handling the area's patient volume, two could be available. That would mean more personnel and overhead costs for the same patient volume. The likely result would be higher overall costs, passed along to employers and consumers in the form of higher payments or increased premiums.

It's a little weird, when you think about it, to hear the head of a business group questioning the value of competition. I thought that was the "genius" of the American health-care system. Can we no longer depend on head-to-head competition to deliver the best possible care at the lowest possible price? It's one thing to hear Republicans denouncing George Bush as socialist, but now even the Chamber of Commerce is sounding kind of bolshie.

Perhaps Whipple's wariness is the result of increased scrutiny I've predicted UPMC will have to get used to. Perhaps it stems from the sense that a Monroeville hospital will be another nail in West Penn's coffin, resulting in a net decrease of competition over the long run.

But more importantly, I think, it's a symbol of how screwed up healthcare really is in this country. And Whipple's point dovetails with an argument made by financial journalist Maggie Mahar in a recent story by my colleague Bill O'Driscoll

"Our whole health-care system is designed largely for the benefit of people who make profit off it, rather than patients," says Mahar, author of the 2006 book Money-Driven Medicine: The Real Reason Health Care Costs So Much.

That creates overspending in several ways, she says. One is overcapacity: Too many hospitals compete for too few patients, whom doctors then hospitalize more than is necessary. "Once the beds are there, we fill them," says Mahar, by phone from New York.

Even if it kills us.

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