Do Retailers Woes Foreshadow Health System Closings?
There was an interesting article at Forbes.com this morning speculating about which giant retailers might follow Circuit City or Linens & Things into bankruptcy or at least dramatically reduce the number of locations. The big names mentioned certainly gave me pause. The article described this contraction as the "inevitable counter punch to the days of fighting hand over fist for market share during an era of loose credit and minuscule interest rates".
When reading that line I couldn't help wonder if the same dynamic is responsible for our local health systems sudden cessation of expansion projects. Did retailers lust for market share also drive health systems to needlessly expand beyond our capacity to sustain them?
Many have argued that building new hospitals drives up health care costs. For them it must logically follow, that as one or more health systems fail, costs will come down. Something tells me it won't be that simple!
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posted by Jon Rauser @ 2:31 AM
1 Comments
As President & Owner of a successful health insurance brokerage in downtown Milwaukee - 
1 Comments:
Jon,
Your skeptisim regarding health costs comming down is well founded in my eyes.
We immediately saw major retailers' defense to the slow down; offer amazing deals to garner the revenue that could be had. Yes, some retailers did fail, but they had problems before the slow-down.
Big Milwaukee healthcare has been afected by the slow-down too. What was their response? To raise prices.
History has a way of repeating its self. I'm going with past performance predicts future response here.
The more likely response is that the health systems will restart construction on their new "stores" which they beleive will be profitable and consider down-sizing or closing less profitable "stores". One of the big systems has already done that (St. Michael Hospital).
Lowering costs is just not what big healthcare does, don't expect a leopard to change its spots.
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