Wednesday, July 06, 2005

Memorial Hermann Uses Rockets for Marketing

The Houston Chronicle reported how Memorial Hermann Healthcare System has reached a confidential agreement with the Houston Rockets, Comets, and Aeros to get more well-to-do patients. The article quoted the system's Chief Executive, Dan Wolterman, "we want to work with these fine organizations to increase our exposure to paying customers." A local "health care expert" noted, "people who go to Rockets games are rich. Those are corporate and season ticket-holders. They are older, they are well-heeled...."
The system will be the "official health care partner" of the teams, and will provide medical care to their athletes. How much the system will pay the team is confidential, although some local experts predicted it was worth more than $1 million.
The system's mission statement is: "Memorial Hermann Healthcare System is a not-for-profit, community-owned, health care system with spiritual values, dedicated to providing high quality health services in order to improve the health of the people in Southeast Texas."
But it looks like the system will go to some marketing lengths to get those "people in Southeast Texas" who are at least "paying customers," if not from "well-heeled" to "rich."


TXMed said...
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TXMed said...

You were incredibly hard on Hermann in your post. Academic community teaching hospitals are in horrific financial shape.

It really is an issue that needs to be in the mind of physicians, even those not intimately involved in academia. Teaching hospitals account for less than 20% of all U.S. hospitals and yet are burdened well over half of non-payment patients. To further complicate the issue, they perform the highest risk lowest profit procedures because no one else will do so.

Consider, to the west of Hermann, San Antonio has seen a number of specialty heart hospitals crop up in the past decade. These non-teaching, for profit centers do plenty of high profit CABGs, and despite the comparative ease of the procedure, the fact they have so much experience with them means people choose them over the non-profit academic options.

What the for profit centers don't take is complicated low profit procedures, which often go hand in hand for two reasons -- reimbursement actually doesn't rise quickly enough for increases in length for some surgical procedures and those complicated procedures are more likely to be associated with low income, even indigent, individuals. So the for profit centers take all the healthy paying patients but probably don't see a whole lot of complicated congenital heart surgeries.

This trend can be broadened to all specialties. Sadly comparatively simple high profit procedures are the only thing allowing the academic health center to break even in the first place.

I applaud Hermann's candor in trying to improve their financial situation by bringing in healthy, paying customers. In the end, only a stable financial situation can guarantee quality healthcare for those who cannot pay.

Roy M. Poses MD said...

Oh no, I was not incredibly hard on Hermann. I have been a lot harder on some other institutions.
It's certainly true that big academic medical centers operate in a very tough environment. Underlying their problems is an irrational reimbursement system that rewards procedures, especially those developed more recently, regardless of their value to the patient, and short-changes "cognitive services," especially primary care. The rise of specialty hospitals that skim off patients with good insurance coverage certainly adds to that problem.
On the other hand, I haven't seen too many academic medical centers fighting these reimbursement rules very hard. (I don't know much about Hermann other than what I read in the media, so can't say if they have been different.) In fact, most big academic medical centers have embraced this trend. For a good history of this, see Kenneth M. Ludmerer's Time to Heal. (