To better cover the debate over health care policy, we've asked Harold Pollack to contribute items occasionally. Pollack is a public health policy researcher at the University of Chicago's School of Social Service Administration, where he is faculty chair of the Center for Health Administration Studies.
The University of Chicago Medical Center on Friday announced up to $100 million in budget cuts, from an annual budget of roughly $1.5 billion. These will be implemented by the start of fiscal year 2010. Fifteen senior executive positions will be eliminated, including the vice president for Community and External Affairs--Michelle Obama's job. (I cheat a bit here. Obama actually resigned her position January 9. I hear she is moving.)
Viewed from 50,000 feet, some health policymakers might see some good in this. America sinks too much of our health-care dollar into tertiary care. Some painful cuts are needed.
This is not a good thing.
First, this is a terrible time for a large employer to eliminate hundreds of jobs. On Chicago’s south side, many of these high-wage jobs are irreplaceable. They are certainly irreplaceable right now. And the hospital’s immediate problem--shared by many local peers--is a precipitous drop in patient demand that reflects increased unemployment and job insecurity, and declining health coverage. The resulting layoffs reflect another downward turn in the recession spiral. They underscore the desperate need for economic stimulus to reverse this process.
Second, such cuts probably accelerate the trend that moves academic medical centers out of their role as community hospitals. It's telling that Illinois's serious Medicaid unpaid bill problem has been identified as one reason for restructuring. Not only do public payers provide insufficient reimbursement--they don't always pay what they should when the bills come due. We don’t know where these cuts will come. Strategic realities being what they are, I doubt the cuts will come in profitable services to insured patients.
Third, these cuts will be executed to address the immediate strategic needs of our medical center. There is no real mechanism to take a broader view. This has attracted controversy. The Chicago Tribune reports that the hospital will forge ahead with its plan to open a $700 million hospital pavilion in 2012 with scores of private rooms, ICU beds, and new operating rooms.
"The top of our list is making sure that our patients have a terrific and compassionate experience here," Dr. James Madara, the medical center's chief executive, told the Tribune. "We plan on continuing with the new hospital pavilion. Our key strategic initiative here is to have a high technology platform."
Madara is a brilliant man in a tough job. I won’t second-guess his efforts to balance our books and to achieve badly-needed upgrades of the physical plant. (And, yes, we're part of the same university, though I tend a different vineyard within our UC world.)
In any event, these controversies exemplify problems well above Madara’s pay grade. In a sane health-policy environment, places like UCMC could make equally visionary investments in primary and preventive care. By any reasonable metric of population health, many ostensibly low-tech services—basic maternal and child services to low-income families, infectious disease prevention and treatment, psychiatric and behavioral health services--are more important than a new ICU or advanced cancer center. Right now, with 45+ million uninsured and Medicaid in stress, it’s unclear that elite teaching hospitals can continue to be terrific and compassionate sources of care on these fronts for their surrounding communities.
UCMC, working with community partners, is addressing this reality by creating new collaborative models. Much of this work was initiated by Michelle Obama, and carried on by her successor, Eric Whitaker. It’s a big challenge, and a delicate one. The university needs to share authority, credit, and resources. Community providers must also change, and operate they operate with more limited resources. Too bad the campaign reporters focused on Mrs. Obama’s wardrobe more extensively than the challenges and accomplishments of her day job.
If prestigious medical centers evolve narrowly and exclusively into high-technology platforms for tertiary care, much that makes them precious will be lost. In so many ways, it is getting harder for academic medical centers to treat disadvantaged patients with the thoroughness and the decency every patient deserves.
For good reasons, Michelle Obama won’t play the lead health reform role that Hillary Clinton did. Yet she has seen the organizational dilemmas from the vantage point of an insider. Now that she’s changing jobs, I hope she educates citizens and policymakers—maybe one across the breakfast table--about what is being lost.