Forecasting is Always Entertaining…And Sometimes a Bit Scary

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Bruce Knepper_Stantec_headshotBy Bruce Knepper, AIA, ACHA, NCARB

I recall numerous forecasts of things to come, be it weather via Joe or the Farmers’ Almanac or the future of healthcare.  Somehow, something that we did not forecast occurs and VOILA! … a different future emerges.  

I remember the early 1980s when the forecasters said we had way too many hospital beds in Allegheny County. Advancements in medical technology, it was predicted, would drive down the need for hospital stays.  

In Pennsylvania, and elsewhere, the bed issue was addressed via  Certificate of Need (CON) requirements. This was intended to control  the growth of beds and reduce overlapping or unnecessary services.  The CON era did not go exactly as planned. Many of my clients were in fact posturing to add beds.  They  feared that if they actually closed beds they would never get them back (from the state) when they needed them. What was the real reason we needed to eliminate beds?  I’ve forgotten at this point.

Time passed, The CON law sunset and we added beds. 

A bit more time passed and we faced the mid-1990s healthcare reform.  Once again, there was  great forecasting about how reforms, embodied in the rise of managed care, would change the cost and quality of healthcare for the better.  

We were going to “manage” the population through the primary care model and thus more aggressively control access to hospitals and specialty healthcare service. In the process, we could drive down emergency room (ER) demand. At the same time, the federal government changed payment formulas for Medicare and Medicaid and in many cases now paid lower reimbursements for the same treatment.

The outcome of these reforms?  We saw the first big round of hospital consolidations and closings. We saw fewer hospitals, fewer beds, and ERs were busier than ever.  The reforms had some rational foundation, but who forecasted that Joe America wanted to be managed?  Many of those forecasted results – lower costs and higher quality – simply did not materialize. 

Fast forward to the current day and again we’re forecasting a dramatic reduction in our country’s healthcare costs as a result of the recent legislation. Yet, to date, we’re seeing unprecedented consolidations within the hospital industry.  We continue to lose small town and rural hospitals, we have fewer beds, and ERs are busier than before.  

Before we start singing Déjà vu from Crosby Stills Nash & Young (One Two Three Four  If I had ever been here before I would probably know just what to do …  Don’t you? )…pause for a moment.

We now see the growth of care managers or advisors whose their job is the help us live a healthy life style.  (In case you fail to see it, this is managed care but with a softer touch).  The belief is that we will have less need for medical professionals at all levels of contact with the healthcare system. Coupled with explosive growth in technology, the prediction is that, once again, we can reduce the nation’s healthcare costs.  It actually makes sense to me!  You can hum the CSNY Déjà vu tune now (One Two Three Four.   If I had ever been here before I would probably know just what to do …  Don’t you? )

Then I started thinking about how long we will live when we put down the biggie fries and pick up a fruit salad on the way from the gym. Thinking often gets me in trouble but here are a few thoughts.    

If we live longer, we will be withdrawing from Social Security longer.  The formulas that created the Social Security system in 1935 did not forecast us to live much past our 60s’.  But, happily, many of us now do. We’re healthier longer and have improved access to preventive healthcare practices. But, did we just move the ever increasing cost of healthcare into Social Security?  Oops.

As we live longer and healthier lives, will we actually cost government programs more money?   I view this like a physics problem we were given in high school. Do you get wetter if you run or walk a fixed distance in the rain?  If my memory is correct it does not make a difference.  So will trading the biggie fries for a fruit cup really cost the nation less in the long run?

Forecast all you want, I will trust that my doctors will be smart, my nurses compassionate, and that technology will enable me to ski until I am 80!  

Bruce Knepper is a vice president in Stantec’s healthcare practice in Butler, Pennsylvania.