Demystifying Medicine One Month at a Time


Good news/bad news from the world of medicine last week. Both stories from the business section of the NY Times and “business of health care” reporter Reed Abelson.

The bad news first: Huron Hospital, a community hospital in East Cleveland, will be closed down by its corporate overlord, the Cleveland Clinic. Like many community hospitals, Huron has declining numbers of admissions and isn’t staffed or equipped to provide the cutting edge care [e.g. transplant, cardiac surgery, or interdisciplinary cancer treatment] favored by behemoth academic medical centers.

I’m sentimental about Huron’s closure for many reasons:

  1. One man's ceiling is another man's floor?

    Further evidence of Cleveland’s decline. After all, Cleveland ranked #5 on Newsweek’s list of dying American cities.

  2. Huron was originally built on part of the estate of John D. Rockefeller, one of America’s original “robber barons.” Rockefeller also bequeathed a nice sum to start a university on the south side of Chicago.
  3. I rotated at Huron as a medical student, working in the ER; I learned a thing or two about suturing and triage.

The Cleveland Clinic makes it clear that closing the inpatient hospital is a business decision. CEO Toby Cosgrove acknowledges that the decision is a difficult one. The hospital is not only considered a local public resource; it’s the largest employer in the community of East Cleveland.

The news is not entirely bleak, however: The Clinic plans to open an outpatient family health center on the site. “When we took over the hospital, we signed up to look after this community,” Cosgrove said.

Contrast the Clinic’s decision with that of Blue Shield of California. The non-profit health insurer made news by unilaterally declaring that it will limit its annual “profit” to a maximum of two percent of revenues. Monies earned over that figure are plowed back to the company’s members, most often in the form of credits on premium payments.

This in effect helps subsidize the cost of insurance for members of that plan.

Sounds good, but you have to wonder:

If a non-profit insurer is making enough “profit” to offer premium credits, you’d think they could just charge lower premiums in the first place. After all, when we talk about annual double digit inflation in health care, isn’t our insurance premium the first place we feel the pain?


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