Dealing with Competition: Nonprofit Medical Centers

February 3, 2011; Source: Star-Tribune | How do community health centers look at “market share” or competition for patients? It is a complex question some of the aspects of which are illustrated in this story in the Star-Tribune in Wyoming.

As the county commission got ready to vote on a $20 million bond intended to fund an expansion of Wyoming Medical Center, one commissioner raised the issue of possible patient poaching by other local facilities. Bill McDowell, a commissioner and a former member of the health center board said, “Other facilities are soliciting business and taking patients out.”

McDowell suggested having the county commission or local hospital “talk” to the offending parties to persuade them to do less advertising in the area but the executive of the health center did not think such a strategy would be productive. She seems to believe that an attraction strategy based on consolidating primary care physicians work better.

But anyone familiar with the financial lives of health centers knows that the mix of patients can make a big difference to financial health. As we observed two days ago in a newswire about hospice organizations, when some institutions purposely cream the better paying or more remunerative cases, it can leave facilities with a real commitment to the uninsured at a disadvantage because they are less able to achieve a healthy financial mix. There oughta be a law.—Ruth McCambridge