In The Netherlands two commercially run hospital groups – with
in total five branches – filed for bankruptcy last Thursday. This happened
after large commercial health insurance companies threw
the towel and refused to further finance the mounting debt and unsolvable issues of these
hospitals, that already had a reputation for enduring problems and alleged
mismanagement. Het FD wrote the following snippets about this:
For
personnel and patients the bankruptcy of the MC Slotervaart hospital in
Amsterdam and the MC IJsselmeerziekenhuizen [hospitals] in Lelystad came almost overnight.
The healthcare institutions of entrepreneur Loek Winter will be dismantled and
the patients will be transfered to other hospitals. The two hospitals filed for
a “Chapter 11” situation (i.e. not being able to pay expenses) on Tuesday, Octobre
23. The official bankruptcy was announced on Thursday, Octobre 25.
On Friday, all patients of these hospitals were litterally rushed to other
hospitals with ambulances, leaving a nearly empty shell with just enough money
to cover a few weeks of polyclinical appointments and treatments for patients
that had nowhere else to go for the time being. After that, the old casino
expression is applicable: “Rien ne va
plus! The hospital is not from you… anymore!”
Dozens of doctors and surgeons and hundreds of auxiliary medical
personnel, janitors, cleaners and security employees were without a job
overnight. And the patients are left on their own, without the doctors and
healthcare services that they need and that some of them already visited for
years and years in a row.
Patients in capital Amsterdam, but especially in Lelystad
and three other cities in the Flevoland polder with formerly a local hospital closeby, now
have to drive much farther in order to receive their necessary healthcare. Not
even to mention when a real life-threatening emergency occurs. In that case
the so-called ‘golden minutes’ might pass while driving on the roads to the nearest
hospital.
And all of them now have to arrange new contracts with
new hospitals and new doctors and go through the whole administrative mumbo-jumbo
in order to receive the same healthcare they already had.
This situations seems to be the moral low of ‘public
healthcare as a market’, which started so jauntily and over-confident in 2005. It
was all based upon the empty government promise of offering the Dutch citizens the
best healthcare at the lowest price. In reality it all turned out to be (still very)
good healthcare, but at a price that is soaring by the year without an end in
sight.
Where did it go wrong?
There is a whole bunch of causes for this phenomenon,
among which the aggressively profit-seeking behaviour of pharmaceutical companies
– especially regarding life-saving, high-end medicine – is one of the most
important. This behaviour let the expenses for patented medicine go through the
roof and is costing society billions of euros in extra cost for healthcare.
Other causes are the ever-growing possibilities to cure
people from diseases and illnesses – or keep their situation stable for a long,long time – via new, high-tech medical equipment and treatment methods of which the purchase
price amounts
to dozens of millions of euros per hospital.
This, in combination with the spillage coming from
excessively administered drugs and expensive, personal medical equipment that
is not repaired, but simply written off after the patient has stopped using it,
makes that the national costs of healthcare are going through the roof.
At the other end of the same medal, the healthcare
insurance companies have become extremely powerful. So powerful in fact that hospitals,
health centres, doctors and paramedical service providers (physio therapists,
dieticians, obstetricians etc.) are sometimes almost in “a race to the bottom”
in order to get the required annual contracts that makes it possible for them
to declare their bills automatically. This automatical declaration is of
paramount importance in order to stay in the business.
And when these medical professionals tried to unite
themselves in order to get a more level playing field against the big insurers,
they were accused of forming an illegal cartel. The latter was of course a
rubbish argument to these eyes, as the healthcare insurance companies are a
kind of unbeatable oligopoli themselves.
Personnel of such hospitals and medical institutions that was sick and
tired of the disappointing salaries, the long and irregular hours of working,
as well as the massive amount of medical administration that was required for
their job, took the slightly more lucrative option of become a freelance
medical professional.
They kept the same work and profession, but had the
opportunity to gain a few extra bucks at the side, by becoming a better-paid professional at the expense of their employer.
This increase in personnel and organizational expenses
for hospitals and medical institutions, in combination with the push downwards regarding the medical rates demanded by the health insurers, acted a double whammy eroding the profits and incomes at two ends. This was a big problem for
non-commercial hospitals that were operated by a non-profit foundation, but a
much bigger problem for commercially run hospitals, that had to yield profits
for their owners and/or shareholders.
Het Financieel Dagblad wrote the
following snippets in a though-provoking comment about the situation in
Amsterdam and Lelystad yesterday:
With
it came that all four [hospitals] had financial problems at the moment they
were taken over by a.o. Loek Winter. The healthcare entrepreneur wanted to
offer his services cheaper and better, but did not succeed in it.
Due
to the sturdy competition in Amsterdam, he had to operate MC Slotervaart with
much lower rates [for medical services] in order to close deals with health
insurers. This kept the margins low and left little money to invest and deal
with drawbacks. Also in Lelystad new investment lagged. This caused the
inhabitants of Amsterdam and Lelystad to find their hospitals less attractive.
[…] This
showed that the market in healthcare is slowly starting to function as planned:
whoever does not attract the patient, has no raison d’etre!
These lines and the remainder of the article, albeit
correct and though-provoking by itself, made me angry...
In an ideal world, the customer has a choice whenever he
want to visit a hospital and a doctor or surgeon for a certain health problem.
He chooses the best hospital, based upon hard data about recoveries and/or medical
errors, personal experiences and experiences shared by others. So he or she can
make an objective decision about where to go to.
The thing is, however, that patients are not regular
customers that can make an objective or subjective choice, as if they go
shopping or visit a restaurant. No, they are often in serious problems: either very
sick, very old, (partially) disabled or even in danger of getting in a coma or to be dying.
Patients often don’t have this choice to make.
They often must be rushed to the nearest hospital in
order to save their life or save them from a massive amount of pain and misery.
The farther the hospital is away, the bigger the risk is of serious
after-effects. That is a no-brainer.
So of course it is bad news that these regional hospitals either
disappear now or will be continued in a much more basical form.
And it is said that another 14 regional hospitals run the
risk of going bankrupt within a limited span of time. Will the Dutch government and the healthcare insurers save these hospitals from their demise? I seriously doubt it!
To me this proves the moral bankruptcy of the market in national
and regional healthcare. I hope that we can stop this bankrupt system within a
decade and nationalize healthcare again, in spite of the obvious drawbacks that
a government-run system offers too.
Public healtcare in hospitals and medical centres isn’t an
entrepreneurial thingamajig, but a necessary requirement for people in jeopardy
of dying or remaining seriously ill. And healthcare insurers are not there to
please their share- or stakeholders, but to deliver a public utility service to
the citizens of The Netherlands. A role that they can do much better, when they
don’t feel the ‘carrot and stick of the market place’!
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