HEALTH CARE/Joan Retsinas

Victory for the Public Good

The gods of the marketplace usually prevail. Maybe not right away, but eventually they triumph. Our better angels recede. Look at hospitals, once venerable not-for-profit endeavors, driven by mission statements that emphasized service to us, their patients. In the past 20 years, the profit motive has seeped in. Today hospitals—both avowedly for-profit and ostensibly non-profit—compete in the same marketplace. To thrive—indeed, to survive — they must lure insured patients, discourage the uninsured ones, and watch their balance sheets, measuring red ink against black. Even the vocabulary has shifted to reflect the marketplace. Trustees and executives do not speak of kindness, or lives saved, but of dollars.

In the long run, Adam Smith promised that such a capitalist mind-set would enhance us all: billions of individual hands, all pursuing their self-interest, would yield a greater good. At least that is the premise behind the enthusiasm for greed as a virtue. Optimists hope that hospitals, competing in the marketplace, bowing to these all-powerful gods, will yield better care for everybody.

Certainly solvency is a prerequisite for service. An insolvent institution—however philanthropic—will die. Mission-driven hospitals eager to safeguard their missions must still remain solvent.

But sometimes the route to solvency runs roughshod over those old-fashioned goals, like service to patients.

Baptist Health, in Little Rock, Ark., took that route to solvency where economics trumps service, and, astoundingly, the US court system recently said: “no.”

When the founders created Baptist Health, I suspect they were driven by age-old religious impulses—surely not marketplace ones. But a few years ago the hospital crafted a marketplace solution to a marketplace problem.

Traditionally, hospitals have granted admitting privileges to community physicians, based on merit. The hospital may evaluate experience, board-certification, or malpractice history. But when it says “no” to a physician, the “no” has reflected the hospital’s role as protector of patients. Typically physicians in a community will have admitting privileges at a variety of hospitals, thereby giving patients a broad choice.

In Little Rock a group of cardiologists owned 14.5% of a specialty cardiac hospital. Baptist Health, the largest hospital system in Arkansas, recognized the specialty hospital as competition. In 2003, to gain a competitive foothold, Baptist decided not to grant admitting privileges to those cardiologists—not because they were poor physicians, but because they were poor assets to the system. The term “economic credentialing” entered the lexicon.

From an economic vantage, the decision made sense. The hospital was denying admitting privileges to physicians who invested in a competing hospital. The hospital maintained that those physicians were likely to refer insured patients there, not to Baptist.

Not surprisingly, those physicians brought suit (Baptist v Murphy).

Surprisingly, the judge ruled in the physicians’ favor. The rationale was not to protect those physicians’ practice, or their incomes. The rationale was to honor the patient-physician relationship, to give patients—us, the public—the widest choice of hospital. The decision bears quoting: “Strong patient-physician relationships are the underpinning of good medicine, and it was uncontroverted … that patients who have long term relationships with their doctors have better outcomes.”

I am enough of a cynic to know the hospital-marketplace gods remain strong. For this decision, appeals may well follow appeals for another decade. Nationally, hospitals want to cut back on emergency room beds. (The University of Chicago has decided to do it). Hospitals zealously pursue dead-beat patients long after discharge, even patients living near poverty. Hospitals may figure out ways to make economic credentialing less overt.

But I’m also enough of an optimist to take heart in the court’s understanding that health care is not just about institutional bottom lines, but about patients.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email

From The Progressive Populist, April 15, 2009

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