PERSPECTIVE

Short-Term Thinking is Undermining Healthcare

In recent months, a few private equity staffing groups have filed bankruptcy with little to no notice to its clients. This leaves health systems scrambling to transition their contracts — a process that ideally should take several months. More crucially, shutdowns highlight the worrying trend of prioritizing short-term profit over long-term impact, stability, and legacy in the healthcare industry.

One alternative to short-term thinking that can benefit healthcare is the infinite mindset. Let’s explore how health system leaders can encourage buy-in for its sustainability strategy.

Imamu Tomlinson , MD, MBA

CEO of Vituity and President of the Vituity Cares Foundation

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Published June 27, 2024

The High Cost of a Quick Buck

It’s old news that the cost of healthcare is too high. While the reasons for America’s higher costs are complicated, it gets even more complicated when companies use a business strategy structured to capitalize on an already economically fragile industry. Although measuring the cost per patient is a metric that we have come to accept, the private equity boom and collapse show how this metric is ill-equipped to analyze the true impact of the practice.

Private equity firms typically invest in companies to grow them swiftly and sell them for a profit, usually within five to seven years. While this strategy works well in industries like manufacturing, it raises questions when the “product” is patient care. The profits generated from this equity flip are siphoned from the local community to maximize investors' returns.

This practice worsens healthcare costs by placing additional margin expectations on an already anemic economy. It also takes clinical decision-making away from the very people best equipped to do it – frontline clinicians who know better than anyone how to deliver quality patient care.

In recent years, private equity has been on a healthcare-buying spree, acquiring hospitals, nursing homes, physician groups, and even hospices. Supporters argue that private equity investments cut costs and enhance quality through economies of scale.

However, these claims are increasingly being questioned, considering growing research suggesting otherwise. A 2023 study published in the BMJ found that private equity investments actually increased costs for payers and patients (in some cases by as much as 32 percent) while having a mixed or even negative impact on quality.

Moreover, many private equity firms achieve their ROI not through innovation or efficiency but by overworking front-line clinicians and nurses. These firms regularly reduce staffing and clinical resources to boost profits, leading to longer wait times, care delays, and lower quality for patients.

All of this is happening on the heels of a global pandemic, which stretched nurses and clinicians to their limits, leading to severe burnout. Current projections show that the United States will need nearly one million more nurses by 2031 — and that 80% of those positions could go unfilled. If we don’t prioritize the well-being of our providers today, who will care for our patients tomorrow?

The Value of a Legacy

Adopting an infinite mindset could be the antidote to the slow destruction of healthcare by short-term thinking.

As popularized by ethnographer and author Simon Sinek, infinite thinkers prioritize legacy and lasting impact over short-term rewards. They strive for constant growth, learning, and future-building. By focusing leaders on a just cause, infinite thinking helps them navigate volatile environments — from regulatory upheavals to global pandemics — while staying true to their values.

Business history is replete with companies that went all in for easy, short-term “wins” — and paid the price. For instance, Apple, after bringing personal computing to the masses, nearly went bankrupt in the 1990s, struggling to compete in the camera, portable CD player, and personal device markets. Only when Apple again began building for the future — disruptively integrating digital photography and music into the iPhone — did its fortunes shift.

So, how might an infinite mindset look in healthcare? First, we must start measuring success not in dollars but in the number of lives improved. Health systems must focus on patients and providers, including investing resources to mitigate burnout and ensure clinicians have long and satisfying careers.

We must also consider what is best for patients, providers, communities, and organizations over the long term. Prioritizing patients' well-being should always be at the forefront of healthcare decisions. When providers are empowered to focus solely on clinical outcomes without the distractions of profit and revenue concerns, it increases patient satisfaction and enhances the hospital's reputation. It also becomes easier to attract impassioned clinicians who value the autonomy to deliver care with the patient’s well-being front and center.

Infinite Benefits

If the infinite mindset is such a sound business strategy, why isn’t everyone adopting it? Planning infinitely often means sacrificing short-term profit for long-term impact, which can be a tough sell to boards and shareholders.

But it’s possible. When advocating for an infinite approach, here are a few benefits to highlight:

Patient-Centered Care. The infinite mindset prioritizes delivering the best possible care and patient outcomes over the long term. It values patient well-being and satisfaction, improving patient loyalty, trust, satisfaction scores, and quality payments.

Adaptability and Resilience. The healthcare landscape constantly evolves due to advances in medical technology, changes in regulations, and shifting patient needs. An infinite mindset encourages organizations to be agile, adapt to new challenges, and pivot when necessary. This adaptability helps businesses thrive in the face of uncertainty.

Continuous Improvement. An infinite mindset fosters a culture of continuous improvement. Healthcare organizations can consistently refine their processes, enhance the quality of care, and find innovative solutions to healthcare challenges. This leads to better patient outcomes and the organization's long-term success.

Collaboration and Partnerships. Healthcare involves a network of providers, institutions, and stakeholders. An infinite mindset encourages collaboration toward shared goals and joint accountability for patient outcomes. Building strong relationships within the healthcare ecosystem can enhance your organization's sustainability.

In summary, the short-term thinking demonstrated repeatedly throughout healthcare destabilizes our industry and adversely affects patients and providers. Infinite thinking isn’t easy in the face of volatility and short-term pressure. But it’s time to adopt an infinite mindset that refocuses healthcare on what truly matters – improving lives.

This article was originally published by MedCityNews in February 2024.

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