Why Do Some Hospitals Excel While Others Litigate?

We are proud that New Hampshire is known as one of the healthiest states in America and given our aging population that is quite a feat. As residents we have long enjoyed the amazing benefit of access to the best doctors, nurses and support staff in America. These outstanding professionals in our medical community deserve to be commended at every level.

Overall, the medical industry in NH represents our largest industry with an estimated $5.5 billion in revenue and a combined payroll near $3 billion annually. With 26 hospitals (24 of which are non-profit) and near 40 urgent care facilities, we have more accessibility to medical services per capita than most any other state.

Unfortunately this level of care may be the pivotal issue that has long been so difficult to understand: How is it possible that one of the healthiest populations in America can simultaneously be one of the most expensive? These costs are the primary driver on our health insurance rates which are also some of the highest in the country.

The operational concern of just how much more money is being spent at some hospitals through administrative costs, combined with the recent lawsuit by 10 of New Hampshire’s hospitals, demanding additional state subsidies will become the catalyst of a much larger question: Is the model broken and how do we restructure medical care utilizing less revenue?

This new showdown between 10 hospitals and the legislature started brewing in February, when the Governor, during his budget speech, criticized hospital operations, by outlining how, during 2010 New Hampshire hospitals paid out $60 million in executive pay, realized $200 million in excess revenue over expenses and had spent an additional $500 million in expansion plans. Quite a staggering picture from an industry which regularly proclaims it is broke then looks to the state and federal government for subsidies. These illustrations by the Governor led to his proposed budget which called for a moratorium on additional hospital expansion, and cut hospital subsidies by millions. The legislature made additional recommendations off this initial proposal. In the end, the $100 million dollar cut to hospitals represented a 2 percent cut to their operations, while the university system realized a 5.5 percent cut and some state agencies saw cuts in excess of 30 percent. 

While much press is being made over the recent suit between 10 hospitals feeling aggrieved, what may ultimately be a larger issue and fodder for more discussion will be how 16 non-suit participating hospitals are dealing with the issue and why.

Although painful, this suit may actually be the catalyst for a real conversation as to the future of health care in this state. Ironically, some hospitals have spent the past couple years restructuring their operations, knowing that we were entering a new era of less government financial support for health care. Many of our Hospitals, with Concord Hospital being a leading example of operating under today’s financial constraints, have risen to the challenge and instituted many positive changes to its operations.

These changes have allowed the hospital to operate in today’s difficult environment, and as a result are prepared to continue its mission of helping those with less, or no insurance. Many CEO’s like Mike Green of Concord Hospital have shown true leadership and skill in managing their company’s future path, while other operations have been stuck in the reactive quagmire of assuming their position in society will insulate them from being required to reform how they operate.

This legislature does not want to reduce the amount of  money in assistance for services which help those most in need, but the reality is there is significantly less money today and most rational folk don’t project a windfall coming soon. Some hospitals, like our businesses and families are learning to operate more efficiently and on a smaller level of income, while others are suing.

Today, as opposed to hunting for answers in court, we need to put our heads together, share ideas and figure out how to make do with less. Our focus needs to be on finding real world solutions for tomorrow, not wasting time pointing fingers as to why it failed us in the past.