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Saturday, April 23, 2016

My theory why small, regional hospitals are disappearing

During the course of the past ten years many smaller hospitals have either closed their doors or merged with larger hospitals. There are various reasons for this, but I think one of the main reasons is corporate cronyism. It's always existed to a certain degree, but it has been put on steroids since during the Obama administration. This is not a criticism of Obama, it's just an observation.

Okay, so money has always played a significant role in politics. You will always have corporations that make a lot of money, everybody always wants more (I don't care who you are) and the lure of making more money is always seductive. 

Now, I don't have a problem with corporations making lots of money, and I never will.  I believe there is plenty of money to go around, enough so that every person, every corporation, in the world could be rich if they made the effort; if they sacrificed their time, and took the risks.  I mean, that's what American Exceptionalism is all about. 

So you have corporate cronyism, or socialist cronyism, or capitalist cronyism, or whatever you want to call it.  This is where large corporations, those with a lot of money like Walmart, send lobbyists or consultants to Washington to make sure laws are passed that benefit them; laws that might help them make more money. 

It is in this regard that Walmart supported a higher minimum wage.  Walmart executives know that they can afford the higher wages, while many of their smaller competitors may not be able to afford it.  In this way, Walmart is able to beat their competitors without having to beat them in the marketplace.

In other words, even if Walmart competitors have a better product, Walmart can beat them because it can afford to make deals with politicians, while their competitors cannot. (Ironically, Walmart's profits have stagnated, and they are now blaming the minimum wage hike.  Go figure!)

This is the same in healthcare.  You have large hospital groups that can afford to send lobbyists and consultants to Washington. They can afford to make deals with politicians. They give thousands of dollars to this politician, or that politician.  They even support laws that they otherwise would not support because they know they can afford it.  

For instance, Obamacare has required hospitals to hire 20 or 30 new people just to make sure they are in compliance with all the new regulations. They can afford to make all the changes that are required, while their competitors cannot.

Not helping here is that Obamacare made it easier for hospitals to merge, almost encourages it.

Because they cannot afford it, smaller hospitals have had to make decisions to either close shop or be bought our or to merge.  It is by this means that large hospitals have become larger, and smaller, regional hospitals have become a thing of the past.

I'm not saying here that I agree with Obamacare or not, this is just what is happening, or has happened. Money is important to get elected and re-elected. Money is important to get your agenda passed, and right now, like it or now, Obama is selling. 

Buying laws is important to benefiting your business.  So, so long as this is legal, it will continue to occur. And, like it or not, it has occurred under the Obama administration more so than in the past.

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