Cutbacks In Healthcare

The cost of industry has a significant impact on health care so much so that while health institutions attempt to save money with cutbacks they see little reward and few gain in return. With technological advances, reduced staff numbers, and further push for greater efficiency the health care industry should see a great amount in savings which then should be pasted on to patients unfortunately this is not the reality. With all of the rising health costs and increased demand, health organizations are being forced to absorb more costs associated to patient care. A majority of the savings that come from cutbacks are being used to make up for those losses so that the institution can stay afloat.
The struggle to stay afloat is very evident in organizations

Unlike other industries, in health care larger doesn’t mean cheaper. It was recently reported by David Wenner, “Unfortunately, studies have shown that medical care often becomes more expensive after hospitals merge. That has also been the case after hospitals absorb doctors’ offices and other medical services” (Wenner, 2013). This is a surprise to many as we are trained to assume that with more resources one can provide more services and with more services being provided the costs associated can be reduced but this is simply not the case for health care. This fact should not be taken in a way that pushed the industry away from growth but from growing in a different way and being aware of the repercussions of merging. The Affordable Care Act is leaving health providers with an ultimatum, either they provide the quality and value of care expected or be penalized, which is leaving smaller organizations to integrate with others so that they can continue to provide care. Merging is costly and complicated as is integrating but it is through integration that the entire industry is being pushed to reduce mistakes and inefficiencies. There has been evidence from studies done by the Robert Woods Johnson Foundation that after hospitals merged costs grew by 20 percent on average (Wenner, 2013). This is an alarming number if one considers the additional increase in hospital mergers happening across the country, “In 2012, there were 105 mergers, up from 50 in 2009” (Wenner, 2013). Whether organizations continue to partner and grow into “super systems” and the effects of such are unknown but either way everyone will be