Sutter is a shining example of this type of health system -- get huge regional scale, vertically and horizontally integrate, control patient flow, and crush payers at the negotiating table. Their prize is having some very profitable hospitals, including the second most profitable in the nation (almost $300M / year in profit at one hospital). And this profit is after paying their execs handsomely
Hospital spending is the biggest driver of cost, in no small part because of practices like the above
The Catholic hospital and medical network in my region was swallowed up with Trinity Health, which is a national medical network. Your interaction with a doctor or hospital is entering a sales funnel, where each additional interaction is engineered to generate more revenue for the network.
A family member had a stroke, which was debilitating and had a bunch of after affects. Prior to hospital discharge, the social worker (aka salesperson) drops a packet of nursing homes in the room and demands that it gets filled out by the end of that day. (which is illegal) That packet doesn't include acute rehab facilities, which is contrary to their physician's guidance. The list is sorted by available beds and exclusively consists of nursing homes owned by the medical network.
That is terrible about your family member though. Its a horrible system
Yea, but this is on over $12 billion in revenue. That's less than 2.5% margin.
it is interesting that sutter's overall system-level profit is $370M. i think they have a few other very profitable hospitals as well. they must spend a lot on corporate sg&A and executive salaries (their CEO has a $7-10M salary IIRC)
https://www.forbes.com/sites/brucelee/2016/05/08/very-profit...
https://www.beckershospitalreview.com/lists/100-top-grossing...
I'd love to see a breakout of corporate g&a vs provider level g&a at sutter vs a set of comparable systems. All that "non-profit" profit has to go somewhere
That's why medical networks are forming -- they put the GPs on a salary, cram in more nurse practitioners and PAs, avoid union contracts that are more common in hospital settings and extract more money from those settings.
So you have lots of implicit and explicit subsidy. Hospitals lose money on Medicare and some medicaid patients, and on no-pay patients who lack insurance. When my wife had my son, the unplanned c-section cost over $40k, largely because of those insane overheads that require subsidy.