Reps can help rescue voluntary hospitals

April 1, 1998

Pharmaceutical Representative

Do small, voluntary community hospitals face separate issues and need different services from pharmaceutical sales representatives than their large, for-profit counterparts?

Do small, voluntary community hospitals face separate issues and need different services from pharmaceutical sales representatives than their large, for-profit counterparts?

This question was raised by Janis Belcher, an executive professional sales rep with McNeil Pharmaceutical and a subscriber to Pharmaceutical Representative. To answer her question, we contacted Harold Hunter, professor and director of health care administration program at California State University of Long Beach (CA).

Pharmaceutical Representative: How has the health care environment changed for voluntary community hospitals in recent years?

HUNTER: Many of these hospitals used to operate with charitable donations, but a lot of their sources have dried up. Starting with World War II, Catholic and inner-city hospitals have lost their middle class clientele, who used to pay the bills, because of flight from the inner cities to the suburbs. This left hospitals in much poorer areas and treating very different conditions and different patients than they ever did before.

Most people are insured through their workplace or through Medicaid, or they aren't insured at all. Until recently, Medicaid didn't pay very well, so what hospitals used to do was take in the Medicaid patients and charge the insured patients a little more. That was called "cost-shifting." But now insurance companies don't want to pay more.

Pharmaceutical Representative: What are the top two issues facing voluntary community hospitals today?

HUNTER: For small voluntary community hospitals, the major issue is payment. The second issue is the different demographic mix. The patient population is younger and faces a higher birth rate, more violence and more trauma. There is a greater tendency for hospitals to have ups and downs in terms of occupancy. There are also a lot of foreign medical graduates because American doctors prefer not to work in places like south Chicago. These hospitals are safety net providers who help those no one else will help. They are always financially distressed and, quite often, need to reach into the community.

Pharmaceutical Representative: What challenges do these issues pose for sales reps?

HUNTER: The challenges are going into bad neighborhoods and understanding what their particular problems are. Some hospitals may have three or four managed care companies, each of which has its own formulary. The hospital may not have control over the managed care companies' formulary, but they have to stock the drugs that comply with all the formularies. Any kind of contribution of drugs, such as pediatric medicines, would certainly be appreciated and helpful.

A rep should go touch base with the hospital administrator, the chief of medical staff and the hospital pharmacist to get a sense of where the hospital is going. PR

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