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The Business of Health Care Report
Today, I will focus on the complex
world of health care finance. Many of you who listen to these reports
are business owners. Your attention is focused not only on producing a superior product or
service but also on making a profit for your company. For private, nonprofit hospitals,
that translates into making a margin that can be re-invested into facilities, programs and
services. What if your business received on
average 44 cents for every dollar you billed your customers? How long could you stay
in business? What if the amount you billed your customers had no relationship to the
amount your customers actually paid you for your product or service? In addition, what if your primary
customer - in our case the government, through Medicare - also was your primary regulator,
reducing payments and at the same time mandating that you provide your product or service
to those who need it, regardless of their ability or willingness to pay? This is the unique world of health
care finance. Like other businesses, health care providers are concerned with how to
control expenses and generate revenue. Yet, on the expense side, costs for drugs, labor,
and equipment are increasing at double-digit rates every year. A staffing shortage, especially among
nurses, radiology techs and pharmacists, has added to overall recruitment and retention
costs. At THR, for example, our labor costs increased by 27 percent from 2000 to
2002. Technology also is expensive - with
each new generation of equipment usually carrying a higher price tag than the last. And,
compounding the financial distress hospitals face are potential cuts in government health
care programs, such as Medicaid and the Children's Health Insurance Program. In a future show, I will examine more
closely the various factors that make up a hospital's financial picture. For Texas Health Resources
and its family of hospitals - Harris Methodist Hospitals, Presbyterian
Healthcare System and Arlington Memorial Hospital - I'm CEO
Doug Hawthorne
with "The Business of Health Care Report" on NewsRadio 1080 KRLD.
©
2003 Texas Health Resources |
I'm Doug Hawthorne, President and CEO of Texas Health Resources, with
"The Business of Health Care Report" on 