'The World Is Flat' — Even In Health Care

October 5, 2007
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As this issue of Health Quarterly went to press, the leaders of two Muskegon hospitals announced they would seek federal approval to merge, the JW Marriott hotel in downtown Grand Rapids readied for opening day, and a national conference to "showcase globalization of medical care and the potential for lowering American health care costs" was declared "historic" (and is scheduled for Dec. 3-5 in Washington, D.C.).

These are not disparate events.

In the late 1980s — before almost a decade of double digit health care cost increases — many hospital administrators widely believed this country would become more "regionalized" in terms of care: Patients would head to East Coast health care institutions for specific heart or brain ailments, and west for other types of medical care. Those in the middle would be referring patients and providing more general practice services. The resulting attrition of revenue for the higher-paying procedures would certainly reduce income levels at the referring institutions. Increasing specialty practices would help balance the books.

And so every region of the country, and every health care institution, has become more competitive, and as they did, the cost of health care services has soared. A survey by Grand Rapids-based The Employers' Association and the Alliance for Health revealed area employers have paid increases amounting to 37 percent in just the last five years. Patients, however, began to find that health care was actually cheaper in foreign countries, where many physicians boasted curricula vitas highlighting educational backgrounds in the United States. Those patients reportedly found that recuperating was made more pleasant at seaside resorts. Some health care professionals may also prefer such settings.

If the "world is flat" in the health care industry, like manufacturing, is it a hypothetical leap to expect the (comparatively speaking) "assembly line" process of patient services to move offshore while the intellectual and inventive processes remain patented in America?

Spectrum Health and Saint Mary's Health Care are literally building on specialization, and Spectrum has been the king of the hill. Since every business is attuned to its market share, Hackley Health and Mercy General Health Partners find it necessary to merge operations, a move made more powerful by the $500 million regional health care system's proposed new owner/operator, Catholic health care conglomerate Trinity Health.

This region's fast-advancing expertise in life sciences becomes a piece of the intellectual property necessary as capital; its ability to attract highly specialized physicians, teachers, researchers and scientists is as important as those who travel in and out of the metro area, finding acceptable accommodations at the JW.

What becomes explicitly important in this region is the pattern of partnerships that have continued to provide the economic fuel for the area economy. In this issue, the story of Kent Health Plan depicts health care issues in general, but especially the manner in which community business leaders embrace and solve problems. President Lynda Zeller refers to the numerous, competing health agencies to which her board members belong: "They give and give and give to Kent Health Plan to try to make this system work. You would not know that they are as highly and intensely competitive as they are in the real world in that board room."

Such partnerships will be required against this backdrop of dramatic change. HQX

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