The Point of Healthcare is Not Just Profits and Growth, it’s Treating Patients

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Giving birth is an incredibly stressful experience. You rush to places, encountering numerous unfamiliar faces, and moving from one waiting room to the next. There seems to be an endless stream of forms to be signed, too much subpar coffee, endless anticipation, and a general sense of discomfort from staying too long in a hospital. And all this happens before the actual childbirth and delivery. On a day when parents already have plenty on their plate, the last thing they need is one more thing to worry about.

For hundreds of families looking to have a child in the greater Windham area, the announced closure of the labor and delivery services at their local hospital means they will have an additional concern. The day of childbirth will now require driving to either Manchester or Norwich, both about 20 miles away.

Behind the decision to close Windham Hospital’s maternity ward, we find the usual stream of financial doom-mongering and excuse-making typical of our era. Hartford Healthcare, the giant non-profit that owns the facilities (along with six more hospitals across the state), says the ward loses money, and that the hundred or so families that gave birth there each year are not enough to keep it open.

For healthcare CEOs and executives, the hospital system in our state is always on the brink of collapse, burdened by too many facilities and patients demanding treatment. However, if we look at the figures and actions of these executives, the picture is quite different. For starters, Windham hospital turned a profit ($16 million) last fiscal year, so it is far from the money sink Hartford Healthcare executives claim it to be. The hospital has been diverting delivery services to Norwich for years, so their efforts to underserve the community for profit have clearly worked.

The Hartford Healthcare system, as a whole, posted a small loss in 2022, after years of record profits. Part of the reason is their considerable investment in acquiring dozens of private practices, healthcare providers, and smaller hospitals. When hospitals merge, they seek “efficiencies” by eliminating “duplicate services” to cut costs. More often than not, this means shutting down wards or healthcare facilities, either with explicit state approval or by “temporarily suspending” them, never to reopen. What is missing, of course, is the understanding that while closing an intensive care unit or maternity ward might help the bottom line, it has immediate consequences for the communities that depended on them. Driving patients to another town half an hour away might cut costs but can also lead to significant suffering for those patients, all to satisfy the accountants.

The clear winners in this game of mergers and acquisitions are the healthcare executives. Jeffrey Flaks, CEO of Hartford Healthcare, earned an impressive $4.8 million last year; Marna Borgstrom, at Yale New Haven, made $5.5 million. The consolidation of healthcare providers under larger entities, whether for-profit or non-profit, is part of a national trend of mergers and reduced competition in the industry. Hospitals have been seeking savings and economies of scale, becoming larger to deliver services at lower costs. In the process, they have slowly squeezed competition out of business, creating regional monopolies. Patients in Windham cannot choose a different health network because Hartford Hospital is the only option in town. If they close a wing of the hospital to save money, there is no alternative.

The core issue behind these trends remains the same: discussing market-based healthcare makes little sense. Firstly, healthcare providers are striving to become monopolies, effectively eliminating the market. More importantly, healthcare should not be treated as a market at all. The decision to deliver children should not be guided solely by profit and loss. We do not expect our police departments to generate revenue; we expect them to keep us safe. Healthcare providers should be viewed in a similar light.

A small rural hospital might not be a lucrative business, but that is not the point of healthcare. This industry is not just about profits and growth; it’s about treating patients. Unless we change how we think about healthcare, Connecticut’s hospital chains will continue to cut services in rural areas until there is nothing left.