"Patients grow tired of being victims, and start wanting to make their own choices when physical reality and fiscal consequences come together. Necessity tends to inspire innovation in both individuals and industries. When it comes to survival, both individuals and industries have to either find or create alternatives when they are left to fend for themselves." - Douglas Castle
THE GROWING U.S. HEALTHCARE CRISIS AND... THE RISE OF "DESTINATION HEALTHCARE."
This article written by Douglas Castle (http://aboutDouglasCastle.blogspot.com) for first publication in The Global Futurist (http://TheGlobalFuturist.blogspot.com).
Dear Readers:
At present, in the United States and in an increasing number of industrialized and even non-industrialized nations, there is a hospital-based healthcare crisis that will be imperiling the quality of all hospital-provided healthcare during the next three years. As you would suspect, it is attributable to that sad, inappropriate ordering of priorities -- profits, first...patients, second -- that will precipate one of the biggest hospital-based healthcare quality declines in world history.
The United States is leading the way in terms of increasing expense, increasing waste, increasing the number and frequency of unnecessary but potentially dangerous procedures on patients, gross mismanagement of funds and an acute but unaddressed lack of adequately trained and managed professional and non-professional staff. Many other countries are following a similar path, but are not falling apart at the seams to the extent that we are.
Background:
Hospitals are capitalized through a combination of sources, excluding the religiously-affiliated "special cases". These sources of capital include: endowments from wealthy donors, board members and trustees; investment by big pharmaceuticals companies (usually to collect data for FDA clinical trials or other regulatory approvals, or to to promote the use of their drugs at the optimal point of sale, i.e., either by the staff physicians and surgeons performing procedures, and by the referring physicians in private practice who send patients to the hospitals); investment by medical device companies (usually to collect data for FDA or other regulatory approvals; educate and assist surgeons and other professionals in the use of new technologies, encourage the aggressive use of their equipment by professional staff, and to outshine [via "generosity"] competitors within their market by a constant presence on the "field of battle"); third-party reimbursement (payments for procedures from either insurance companies or from Medicaid and other reportedly wasteful government-run enterprises).
As these money sources dry up due to a beseiged economy, and as hospitals are rapidly losing their profit margins due to an ever-accumulating proliferation of poor management practices, those few "surviving hospitals" may be doing an increased amount of sophisticated maneuvering (this actually brings to mind the dishonorably demised Enron Corporation and its co-conspiring auditors, the late Arthur Anderson and Company, although there is admittedly, a line between the "aggressive" practice of medicine or undertaking of procedures and the "abusive" or fraudulent practice of medicine) which will, of course, adversely impact the quality of patient care as it drives up the expense of an average procedure or hospital stay.
This year, U.S. employers have reported that their healthcare insurance costs for covered employees have increased 8.3% since the passage of ObamaCare. It has been projected by the pundits that the insurance companies (who are seldom denied an increase in premium rates if they offer any explanation at all), bracing for the nation of covering an increasing population of formerly "ineligible" employees and their family members, are going to be kicking premiums up by another 18% to 22% by the end of 2011.
Of course, these costs will be passed along to employers (who will not be able to employ as many full-time individuals as they might otherwise have), the poor and unemployed (who will be required, by law to have health insurance), and the providers of healthcare, who will have to be a bit more clever in terms of coding procedures for reimbursement, and who may have to be a good deal more creative (not meant in a positive way) in diagnosing, testing and treating patients.
Of course, the insurance companies, long engaged in the indirect corporate practice of medicine, will dictate to the doctors and the hospitals which procedures are "necessary" and which are "not," (by their willingness to reimburse or pay for a procedure) as well as how long a patient should remain in the hospital until he or she is miraculously (or otherwise) sufficiently healed or rehabilitated to head back to work at the quarry.
Ultimately, at the end of this chain of buck-passing, all of the money required to save US hospitals from their current (and steepening) financial problems will have to come from the patients and the taxpayers-at-large. Procedures will increase in expense; premiums will increase in expense; the quality of patient care will continue to suffer.
The industry that might benefit is now categorically referred to as Destination Healthcare, (it had previously been referred to as "medical tourism" among other terms) an arrangement where a specialized company helps a patient (or that patient's caregiver) to locate a suitable practitioner, in a suitable hospital, and in a suitable country outside of the US (for example, China, Taiwan, Singapore, India, etcetera) where the procedure can be performed at comparable or better quality than in the US, but at a significantly lower price. If you were to marry the tourism and healthcare industries, the couple's likely offspring would be some variant of Destination Healthcare.
In certain cases, US-based medical insurers will even cover the cost of treatment and procedures done outside of the US -- the potential benefit to these insurers is the decrease in the dollar amount of payouts on patient claims; but they do bear an increased exposure to lawsuits and large payouts if things don't work out for any reason.
In other cases, a patient or caregiver may determine that even if a procedure to be performed outside of the United States is not reimbursable through their healthcare plan, it is still cost-effective to have the procedure done with payment out-of-pocket. Given quality of patient care and aftercare considerations, the decision regarding whether or not to look into the possibility of Destination Healthcare is becoming an increasingly common one as the public becomes more aware of this alternative.
That's right -- as money gets tighter in the US, and as having medical procedures performed and aftercare or therapy provided becomes an increasingly wide and short road to personal insolvency, I would project a significant increase in the visibility, activity and profitability of these specialized Destination Healthcare firms. While The Global Futurist does not provide any investment advice, it would seem that the companies providing this service will be getting an increasing share of the total United States healthcare market.
Healthcare, as in the case of too many things, has now become a commodity, and price-shopping is going to be on the rise as consumers (patients) become a bit better-educated and less prone to victimization at the hands of a healthcare system that is all too often putting the Oath of Hippocrates aside in order to sustain profits through an unspoken "Oath Of Hippocrisy."
Faithfully,
Douglas Castle
http://www.douglascastleblogosphere.com/
Tags, Labels and Titles: Destination Healthcare, ObamaCare, healthcare insurance premiums, fiscal crises in hospitals, the decline in the quality and availability of US healthcare, healthcare as a commodity, the decline in the quality of patient care, insurance companies engaged in the corporate practice of medicine, fiscal mismanagement of healthcare providers and hospitals, healthcare alternatives, rising healthcare costs, declining healthcare quality.
Douglas Castle
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