Hospital Wars

On Tuesday USA Today reported that hospitals spent $100 billion dollars for capital inprovement over the past five years, a 47% increase fom the previous five years. Another report this morning in USA Today relates that the nation"s hospitals posted profit margins that reached a six year high in 2004 and indications are that 2005 was just as good. A report by the Center for Studying Health System Change found that hospital price growth slowed in 2004 for the first time in seven years. One-third of all health care spending in the USA is for hospital services.

An op-ed in the Wall Street Journal today lamented the closing of a for-profit hospital in Milwaukee after one year of operation. It was written by a cardiologist who had invested and was working in the hospital. He reported that the hospital was built and organized to care for patients with cardiac problems. It was his opinion that other hospitals and government regulation contributed to the closing.

I am reminded of something written by Peter Drucker. Efficiency is doing something right and effectiveness is doing the right thing. Sort of hard to sort them out sometime.