Financially Distressed Hospitals Need More Talk Less Walk
November 13, 2007
[Image: You talking to me? Photo by Ped Xing, Austin, Texas, 2005]
Writing in his HealthBlawg, David Harlow tells the tale of Boston\’s financially distressed Carney Hospital and asks the question: When do you pull the plug on a hospital? The story is one that has already played out at several other hospitals in the northeast over the last year, and which looms at many others. Recounting a story and an editorial appearing in the Boston Globe, Mr. Harlow\’s account captures the familiar push and pull between the major “stakeholders” in these cases: the governing board (or owner) of the facility, the state regulatory authorities, the city in which the hospital is located, the financing agency or bondholders of the facility\’s debt, and the facility\’s rank and file employees (or their union).
These parties may, in fact, be holding productive talks, but more likely remain engaged in “a lot of wishful thinking.” So, as Mr. Harlow asks, what is to be done?
If Carney is like most distressed hospitals, the stakeholders are approaching their predicaments with the assistance of good legal counsel, each focused on protecting them against their respective “worst case” scenarios. There is no lawsuit or other articulated conflict uniting the stakeholders in a common discussion, much less a common dispute to be resolved. Thus, whatever “talking” there is takes place between only two of the stakeholders at a time and tends to be of the “doomsday” variety. This approach ignores the fact that each stakeholder is very unlikely to achieve its “best case” scenario by unilaterally imposing it on the others, and that each stakeholder acting unilaterally will probably obtain a worse result than it would if all of them pooled their interests in a common discussion.
David Harlow suggests one such collaborative outcome, and mentions another offered by Paul Levy in Running A Hospital. I don\’t know whether their solutions would work. My point is that all of the stakeholders need to talk with each other if the best alternative for all is to emerge. The services of a neutral, whether called a mediator, negotiator, or facilitator, would greatly improve the chances for that best alternative to occur. By focusing on that end result, and facilitating a collaborative process, the neutral would supply the catalyst needed for the stakeholders to achieve what they currently cannot see. Surely in the nearby hotbed of dispute resolution there are a number of highly qualified candidates for that role. It would be time, money and energy well spent.