Unsustainable Costs of Library Resources

Sometimes I feel like medical librarians have been talking to brick walls.  Either that, or we are talking to bobble heads who don’t really listen to us but nod their heads in agreement.

I get a weekly email summarizing the healthcare industry.  It is broken into local and national information and it is often an interesting quick read.  Today I read the article “US medical expenditures on the rise, except for primary and home health.” The largest expenditures were attributed to prescribed medications, specialty physicians, visits to the emergency department and inpatient hospitalizations.  While that was interesting, what really caught my eye were the links to the Top 40 articles in the past 6 months on the right:

• Dallas hospital unexpectedly closes
• CHS to sell 25 hospitals as net loss swells to $1.7B in 2016
• Mayo Clinic to give preference to privately insured over Medicaid, Medicare patients
• Cleveland Clinic’s operating income plummets 71%
• Health system CEO pulls out $6M check to pay debts during budget hearing
• Trump’s $4.1 trillion budget: 9 healthcare takeaways
• Florida hospital files for bankruptcy
• Operator of 179 cancer treatment centers files for bankruptcy
• Arizona hospital falls into bankruptcy less than 2 years after opening

Besides the one article about Trump’s budget, the first 9 articles listed were all about hospitals losing money or going bankrupt.

While Medicaid enrollment has increased, its reimbursement is significantly less than private insurers.  Then you have the increased costs of providing care. “In 2016, Cleveland Clinic’s expenses totaled $7.3 billion, up 19 percent from $6.1 billion in the year prior. The increase was largely attributable to growth in pharmaceutical, labor and supplies costs, which climbed 23 percent, 19 percent and 13 percent, respectively, year over year.”  The Cleveland Clinic is not alone,  Nationally, hospitals’ operating margins have shrunk due to smaller reimbursement, regulatory uncertainty and new alternative payment models.

Yet medical library resource vendors operate business as usual by increasing the costs of their products to clients (libraries) that are viewed as expensive cost centers in an industry that is losing money.  When librarians complain to the vendors known for price gouging, the vendors answer is to have the hospital shift the cost of their product out of the library budget and to IT, operations or another department with more money.  It doesn’t take a financial analyst to know THAT ISN’T A SUSTAINABLE SOLUTION!!! The hospital still pays for that product at a rate far above inflation and far above their reimbursement.

Librarians have been telling vendors for years that their large price increases are unsustainable.  You could say we are complicit because we suck it up and pay for the price increases by finding the money through cutting book budgets, dropping other products, etc.  However, we are between a rock, a hard place, and an abyss.  The doctors need the price gouging resources so they can practice and treat patients. The vendors justify their price gouging by saying they actually “save the institution much more” because the doctors use it.  Hospital administrators end up cutting budgets overall to get handle on increasing costs.

It isn’t a pretty picture and it will get worse.  Are they getting the same healthcare industry news I am getting?  Are the just putting their head in the sand?  Is it like the home loan industry where the banks knew something was amiss but they rode that horse until it died a national debt crippling death?

Just wondering…..