Hospital Closures Call For A Reimagined Approach To Care Delivery
Hospital closures have been called a “new public health concern,” but it’s a phenomenon that isn’t new at all. Particularly in rural areas, hospital closures have been happening for decades because healthcare’s business model is fundamentally broken. As we were recently reminded, if there aren’t swaths of people signing up for elective procedures or in need of emergency care, hospitals can’t keep the lights on.
Whenever a hospital is on the brink of closure, the initial reaction is a scramble to save it with a financial bailout because of the negative impact its closure would have on patients. That’s why the government has spent $178 billion in provider relief funding thus far, and even though some hospitals stayed profitable throughout the pandemic, why HHS is currently considering extending the June 30 deadline by which providers need to spend their bailout bucks, or return them.
However, decreased demand for emergent care and nonessential procedures is a good thing from a population health standpoint – hospitals were never meant to be destinations of choice – and more government relief simply isn’t a smart or sustainable solution! Instead of spending billions more to prop up a crumbling system, leaders need to finally flip the script and embrace a solution that gets at the real root of this hospital closure issue. That is, leaders need to redesign the healthcare system as we’ve known it, starting with the buildings we call hospitals.
Brick and mortar investments that are doing well right now need to be maintained and upgraded to ensure that they retain their competitive advantage. That means investing in more next-generation, tech-enabled solutions like robotic surgery or artificial intelligence platforms, with a particular emphasis on those that can deliver more value to the patient at a lower total cost of care. According to a recent survey, 36% of healthcare executives said AI is a priority today, and 74% that it will be by 2024.
As for the brick and mortar hospitals that are currently struggling to keep the lights on, potential investors need to take a careful look at why that is, then think through how that building could potentially be repurposed to meet the community’s growing needs. Perhaps another full-service hospital with all kinds of equipment and bells and whistles isn’t needed, but a center that produces positive patient outcomes for a particular kind of procedure or service often utilized by the members of that community is. In addition, perhaps remote, robotic surgery or specialty treatments can act as an alternative to investing in expensive equipment to address high-risk tertiary care needs, for which there is little day-to-day demand in rural areas, and also for which consumers would typically be forced to travel far distances to larger institutions. Given advancing technology, more and more complex interventions can be handled in less intensive settings, from home dialysis to same-day hip and knee replacements.
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That realization already occurred to the University of Alabama at Birmingham (UAB) Health System. Twelve Alabama hospitals have closed since 2011, as has the labor and delivery unit at Bryan Whitfield Hospital in Demopolis. In response, UAB has sought to “recruit family medicine doctors to boost primary care, prenatal, and labor and delivery services in Alabama,” and even purchased land to build a center that would house such specialty physicians.
When Bringing Value to Healthcare was written in 2016, we similarly saw some hospitals turning bricks and mortar into assisted living, long-term care (LTC), and long-term acute care hospitals (LTACHs) to meet the demands of aging Baby Boomers. Others were creating temporary residences for families visiting sick relatives receiving needed treatment and rehabilitation, and still others partnering with social service agencies to create residential living centers for individuals who were homeless, suffering from severe mental illness, and other vulnerable populations.
In today’s environment, repurposing rural hospitals whose margins may have been thin for good reason to address social determinants of health and behavioral health issues would give the acquiring system a huge competitive advantage over those that have no such centers. Covid-19 highlighted the consequences of our country failing to take social determinants into consideration and continuing to take a reactive approach to care, and it likewise worsened behavioral health issues that have long been neglected. Payers are increasingly interested in ways to reduce downstream costs, meaning that systems with upstream solutions will more readily win their favor.
There couldn’t be a more opportune time for healthcare executives to reimagine the role of their struggling buildings. So rather than combat closures with bailouts that allow bad healthcare business to continue, it’s time we instead rethink it.