Hospital beds, health planning and controlling costs

In business, many major projects begin with a needs assessment. Since becoming involved with health care reform years ago and helping to form the grassroots reform group today known as HealthRIght, I have long advocated such a planning process for our health care system.
I can happily report we have made some progress in convincing our state’s leaders of the importance of a highly organized and informed planning process toward re-engineering Rhode Island’s health care infrastructure to be more efficient, more effective and less costly.
Coordinated health planning was passed by the General Assembly several years ago and finally received at least nominal funding at the outset of the Chafee administration. Now, with the release of the hospital-bed assessment by the Lewin Group, we are starting to see results, admittedly sketchy, of that effort.
With the report, Lewin has provided a rather broad-stroke overview of the state’s system of hospitals, the single-most-costly element of our provider infrastructure.
Already some in the media are excitedly drawing conclusions from the report which are not explicitly stated, namely that the state may have several hundred “extra” hospital beds and perhaps even one excess facility. Before leaping to a conclusion, however, a more reasoned analysis of the findings would seem to be in order.
With regulators in the R.I. Department of Health and the attorney general’s office facing imminent decisions about changes in control of a number of the state’s hospitals, I think we need to get this right. Such decisions, once made, will not be easily corrected, and the costs and results will be with us for a long time.
The report itself acknowledges that there is no recognized standard for how many hospital beds are needed to support a given population. It depends on myriad variables and begs the question of how much “excess capacity” should be maintained for seasonal fluctuations and/or emergency or disaster situations. Should we decide to bear these risks and lean down the hospital network, it is still rather uncertain how much would be saved. Most hospital insiders concede that simply reducing bed capacity across the entire system would decrease costs only marginally. If an entire facility could be eliminated, how would we choose which one?
There will be those who suggest that market forces should be the only proper way for the system to evolve. If that opinion prevails, we will essentially have a natural selection process as crude and disorderly as any in nature. Like shipwreck survivors on an island with insufficient food and water for all, the fiscally fittest will eventually outlast the others. If we allow private (for-profit) enterprises to support some of the weakest, the drama will last longer and could have different outcomes. In spite of my business orientation and belief in true competitive markets, I cannot see how such a process makes any sense when rational planning and collaboration among our existing charitable hospitals could alleviate the disruption, chaotic transition and danger to patients the “free market” alternative would surely involve.
Of course planning is one thing, but in business we take for granted that we have the authority and ability to implement our plans once they are fully developed. This certainly isn’t the case for the Health Care Planning and Accountability Advisory Council.
No matter how prescient the conclusions and recommendations from its research may be, no matter how fair and objective, whatever it produces as advice to the legislature will be immediately subject to a tsunami of special-interest lobbying. Frankly, I think having given the power to appoint the members to the legislature and governor; we should then give the group the authority to enforce its decisions.
Now I realize this may seem like a drastic centralization of power, which is where the concept of coordinated health planning comes in. The present system is so fragmented that it has lost the ability to affect the health care system in any meaningful way. A perfect example is the Health Services Council of the Department of Health.
Despite statutory authority through the director to rule on licensure and capital spending, the lack of an overarching plan often has made its deliberations meaningless, and the dedication of its expert volunteers squandered in petty skirmishes.
HealthRIght intends to introduce legislation later in the session to fix the coordinated health planning process – to make it more robust, better funded and effective in guiding the inevitable changes which we need. Most notably we will propose to change the name and hence the mission of the Council to the Healthcare Planning and Accountability Authority. Stay tuned. •


Ted Almon is the co-chair of the executive committee of HealthRIght, a statewide coalition of health care industry, small business and labor dedicated to health care reform, and this piece represents the position of the executive committee.

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