Looking to 2009
Last February, I remember sitting in a HIGPA Pharmacy meeting when one of the speakers told the audience he had first-hand knowledge that Michael Bloomberg, the mayor of New York City, had completely cashed out of the market. I didn’t give that news much thought. Then in May, my brother-in-law urged me to buy as much GE stock as I could, because it was below $30 per share and would never be that low again. As I’m writing this, GE stock is less than $11.
For me, this last year has been a wash – I didn’t avoid the huge decline in the market, but I didn’t compound the problem with a crazy reaction to the pending troubles.
I worry that many of our nation’s hospitals and IDNs feel the same way. They started 2008 knowing credit was tightening, but without any idea it would get this tight. They were in the midst of a presidential election that – regardless of the result – would impose great changes. Charitable and corporate donations were rolling along just fine, with the Dow opening over 13,000. Who could imagine it plummeting to around 7,500 before the end of 2008?
As our leaders in Washington debate stimulus plans to jump-start a recovery, healthcare leaders everywhere are wondering where is this going? How will it affect their company, their hospital, their department or their patients?
I wish I had answers for them and for all Americans that have had the rules change on them so fast.
One thing I am confident about is that as Washington pumps perhaps hundreds of billions of dollars into healthcare, the politicians are going to want better results for their investment, and I think I am fine with that. After all, if our president and legislators are our representatives, then it is the American people basically asking for more money. This time it’s not quantity that will be demanded, it’s quality.
In the post stimulus world of healthcare, no longer will acceptable outcomes be good enough at any price. Nor will great outcomes be a luxury for the big branded providers to use to market and differentiate their offering from the competition. It is all possible if the data collected for many years on the optimal care practices, product utilization and supply processes enabled by all in the supply chain be mobilized to actually start significant progress in connecting cost and quality.
So if in 2009 the economic climate worsens, if you are confident that your company is truly contributing to quality outcomes, it will be much better than simply staying above the evaporating line of what is acceptable.
Thanks for reading this issue of The Journal of Healthcare Contracting.