Hospitals Under Attack for Spending Money on Capital Projects
The front page of today’s Chicago Tribune has a huge picture of a building under construction at Rush University Medical Center, accompanied by the headline, “Big hospitals flush with cash despite industry’s dire warnings: Critics say large hospital operators that are amassing cash are doing so at the expense of patients.”
The article goes on to point all the major hospital systems in the Chicago area that are undergoing new building projects and buying up other hospitals. “Many are spending unprecedented amounts on new buildings and seeing some of their best improvements in cash since the dot-com boom of a decade ago,” writes reporter Bruce Japsen.
I agree that it may seem out of balance with the financial pressures that hospital industry lobbyists are telling Congress, not to mention the millions of uninsured people in this country. But the argument that hospitals and health systems should not make capital improvements and instead provide charity care or reduce the cost of care is a little short sighted.
There are a lot of reasons why hospitals and health systems decide to replace or renovate buildings, but mostly this is happening because their facilities are 40+ years old, more costly to operate, and don’t support current technology. By investing in new facilities, most are creating healthcare environments that are more efficient, safer, and less stressful for both patients and staff. (Using research and data from actual facilities, The Center for Health Design has made the business case for building better buildings.)
It doesn’t cost the patient any more to visit a brand new hospital vs. a 50-year old one. But it does cost the hospital or health system more to own and operate a 50-year old hospital vs. a brand new one. And most likely, all the projects the Tribune article mentions were financed and set in motion 5-8 years ago. Is it fair to point the finger at them for making decisions before the economic downturn even existed?