Frequent THCB contributor Maggie Mahar returns today with another of her "Inside Baseball" posts on the healthcare industry. Is the recent boom in hospital construction a sign of a healthy and vibrant industry as many prognosticators have argued, or a symptom that something is going very wrong beneath the surface. This piece first appeared at Healthbeat, Maggie’s blog at the Century Foundation.
Yesterday, I wrote about the hospital-building boom and suggested
that we may not need it—and more to the point, we may not be able to
In my description of how hospitals are adding costly amenities like
waterfalls and all-private-rooms in order to woo well-heeled,
well-insured patients, I suggested that the money might be better
invested in computerized medical records or Level I trauma units. (In
some parts of the country, trauma units are spaced so far apart that if
you are in a car accident, there is a real danger that the unit will be
too far away to be of any help.)
Barry Carol responded, agreeing that safety should come first, but
also arguing that the private rooms help prevent infections. As for the
waterfalls, he noted that “while they may make good journalistic copy
as illustrative of frills,” given the high cost of hospital
construction “they probably get lost in the rounding as a cost factor.”
See his comment here.
Because Barry had raised a number of good points, and because the
hospital boom is such a large and crucial subject, I decided to return
to it today while responding to his comment.
I’m afraid the waterfalls are more than good copy for journalists..
Similar amenities are being included in hospital construction across
the country–and it adds up.
Here are a few examples from a 2006 piece in The Washington Post:
“Walk past the free valet parking . . . and into the light-filled
lobby, where soothing tunes waft from a baby grand piano and macchiatos
are brewed at the coffee bar…Only the patients in wheelchairs give away
that this is a hospital.
“All five of Montgomery’s community hospitals are in various stages of
expansion. As they increasingly compete with each other . .
.flat-screen televisions and CD players are standard in many rooms at
Montgomery General in Olney.
"We want [patients] to leave here and then brag about it," said John
Fitzgerald, president of Inova Fair Oaks. "There’s a competitive nature
to health care, and we want to be first. And part of that is the
"This trend has its critics," the Post notes, "including industry
consultants who caution hospitals to remember that their primary
mission is to treat patients . . .Some hospital administrators, too,
are leery of overspending on frills. Brian A. Gragnolati, president of
Suburban Hospital in Bethesda, says: ‘I would rather put money into
nursing care and staffing and making sure our doctors are there,’ he
said. "At the end of the day, it’s about taking care of patients."
""As some of the Washington area’s hospitals expand at record levels
and add amenities, others don’t have that luxury.. . They are buckling
under the burden of caring for the uninsured, raising concerns about
widening disparities in health-care facilities.”
The May/June 2006 issue of Health Affairs offers a window into
the surge in the cost of hospital construction as hotel-like amenities
help drive up costs: : “Modern Healthcare magazine reports that costs
for completed acute care hospital construction rose from $9.2 billion
in 2000 to $13.0 billion in 2004, and costs for construction that broke
ground or was in the design phase increased from $30.8 billion in 2000
to $54.0 billion in 2004.”
The Health Affairs article continues by reporting on 1,008 interviews
done by the Center for Health System Change in sixty randomly selected
and nationally representative U.S. markets. The Center has been doing
these interviews every two years for ten years. In the latest round of
interviews, they asked questions that explored the kinds of
construction projects hospitals planned, had under way, or had recently
First, the researchers confirmed the move to private rooms, but
questioned whether this was really about preventing infections:
“Although the movement to private hospital rooms partly reflects
concerns about infection transmission and patient privacy, by and
large, it reflects hospitals’ desire to provide a potentially costly
patient amenity to attract or maintain business.”
If you think about it many of the most serious infections acquired in
hospitals are not air-borne; they are transmitted by hospital personnel
who haven’t washed their hands, or by equipment that hasn’t been
cleaned properly. Being in a private room offers no protection against
Here I would add that since very few insurers pay for private rooms,
when a hospital builds only private rooms it is turning itself into an
exclusive hotel for those who can afford it. Particularly if a patient
is seriously ill, and stays in the hospital for two or three weeks, the
extra $300 to $500 a night of a private room—plus a deductible and
co-payments for other items – is likely to be more than many
middle-class patient can shell out.
> Finish reading Maggie’s piece over at TCF.org