Next Things First

Not Sure Which Game Inside Baseball Is Watching by Rob Coppedge
September 23, 2008, 1:36 pm
Filed under: economy, health it, nashville market | Tags: , ,

Nashville-based PR firm, Jarrard, Phillips, Cate and Hancock, released the results of a recent survey of health care “players'” views on the recent economic turmoil. Like Jarrard’s regular publication, Inside Baseball, the survey had a slightly humorous tone – but reading the results hammered home that the traditional, for-profit health care services establishment in Nashville might be so focused on their own inside baseball that they are actually watching the wrong game.

Reading these results – and, for that matter, any issue from the Inside Baseball archive – I worry that the Frist family might need to get a restraining order. The adoration for HCA and the wisdom of the Frists isn’t misguided: They have certainly built a strong and iconic company that in its repeated private to public to private transactions and the convection current of M&A around its hospital assets has made the Frist family, and oftentimes their shareholders, a considerable fortune. And the Inside Baseball team captures the sentiments of many in Nashville:

…the financial world is upside down; Cressey [Senator Bill Frist’s firm] has more money than just about anybody in town – and now the Frist Family has been named by our readers as the most likely survivor of one of the most dramatic financial fallouts … ever. (That China expansion thing is making more sense every day.)… Just who will benefit from the fall out? You said hospital giant HCA (shocker) and the city’s endless crop of country music songwriters.

However, it is uncertain that the business model that HCA has ridden for all these years is going to be a winner this time. Thriving through superlative lobbying efforts to optimize reimbursement levels and underinvesting in technology, it is questionable how this legacy player will compete as demographic and economic necessity shifts care out of the facility. Burdened by a significant debt load and leadership that doesn’t waste money on newfangled innovations, the company has its sights set firmly on doing business as usual.

And as we learn from Inside Baseball: As HCA goes, so goes everyone else in town.

What a frustration to the real entrepreneurs in Nashville who can’t raise money for new business models and innovative health care-focused technologies. The lack of capital and support has driven many of these young management teams out of the city and into new markets.

This is Nashville’s loss, but also theirs – as the strong ecosystem of “legacy” health care companies – which among other things own and manage hospitals, clinics, surgery centers, etc. – is the target client base for this next generation of health care services companiea with business models focused on making the big guys faster, smarter and more agile (really correcting for years of under, or incorrect, investment in information technologies).

As the financial crisis ripples through Wall Street and Washington, perhaps an unintended consequence will be an increased focus on administrative and clinical efficiency driving solutions from a new wave of innovative health care companies. Perhaps our nation’s fiscal crisis and both political parties’ commitment to health care reform will refocus our attention.

Or, maybe as more than a third of Nashville’s health care elite said:

…drinking is the best course of action right now.


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