Wall Street's growing influence on plastic surgery

The advent of managed care has unleashed market forces on the health care system. One result of these new pressures is a shift from nonprofit to Wall Street-based financing. This report quantifies these trends by comparing health organizations' financial structures in the 1980s and now. The reasons behind this shift and the function of the stock market are examined. A review of Wall Street's key financial measures confirms that health care has shifted to the stock market as its principal means of financing. The stock market works by assigning a current price to a company's stock based on estimates for future earnings. Thus, companies desire predictability in their costs, revenues, and profits. Plastic surgeons can master this system by meeting the challenges imposed by Wall Street financing. Important steps include continuously measuring costs and outcomes of procedures, demanding cost data from hospitals and payers, using these data to improve costs and outcomes, and taking advantage of the system's openness to innovation and easier access to capital. As they seek to protect their role as medical decision makers under the new free-market system, plastic surgeons can benefit from understanding the mechanisms of the stock market.

The new economy is stronger than you think

Many policy makers at the Fed contend that the new economy is a fragile bubble--and that with the "irrational exuberance" of the capital markets, the sky is going to fall on the U.S. economy. That couldn't be further from the truth, according to William Sahlman. As long as the government doesn't interfere, he argues, the economy is sturdy, resilient, and raring to grow. The new economy is strong for several reasons. First, it is based on a business model that works. Any business system that relentlessly drives out inefficiency, forces intelligent business-process reengineering, and gives customers more of what they want will be sustainable. Second, it is built on America's admiration for entrepreneurs and its tolerance for failure, not to mention its easy access to capital. Third, the new economy is attracting the best and brightest minds in the country. And finally, says Sahlman, the new economy is strong because it is spreading. It may be primarily an American phenomenon now, but in a few short years it will start to show its effects everywhere, making the whole world a more productive place. Still, Sahlman believes, the road ahead is not without potholes and sharp curves. But that is what the new economy is all about, he maintains--companies attacking the status quo and entrenched players, companies experimenting to find new technologies that improve or replace earlier ones. Such activity presents no cause for alarm. The economic, social, and cultural factors undergirding the new economy are rock solid. It's simply a matter of letting them stand.

The ratings slide. Are we headed for a capital crisis?

On hospital credit ratings, the news is tough and tougher--what many industry watchers call a capital crisis in the making. Rating agencies contend the situation has been building for years, even while hospital margins reached historic highs as recently as 1997. "Then everything fell apart at the seams," says one bond rating pro.

Monstrous problems. Medicare's not the only bogeyman haunting the long-term-care industry

The problems in the long-term-care industry are positively monstrous. While many executives are pointing and screaming at Medicare cuts, lurking in the shadows are some self-imposed problems, such as the scary pile of debt many publicly traded companies are sitting on.

Hospitals using lenders of last resort. Some struggling providers say nontraditional financiers are abandoning them

Hospitals and health systems are increasingly turning to nontraditional lenders to sell their receivables or back multimillion-dollar sales of troubled operations. But as some recent incidents show, the relationships with those financiers also can be troubled. Some critics contend that these lenders of last resort can be prone to panic.

Designing the next generation of American hospitals

Change has always been a part of the hospital's operating environment, but the changes predicted for American Hospitals during the next two decades pose considerable challenge to those who manage health care services and those who design medical facilities. The next generation of American Hospitals are responding to changes in technology, availability of human resources and demand of the public, private and government interest groups. Hospitals and architects that understand the predictable changes and anticipate the unknown, will be able to plan a facility that responds to the needs of future health care delivery.

Bond insurers put the squeeze on strapped hospitals. Credit enhancers pressure some facilities to pay off their debt by merging--or else

Struggling hospitals are making their bond insures nervous. So the credit enhancers are getting tough with strapped facilities. Find a deep-pocketed partner or we'll call your bonds, is the message some hospitals are getting. Hospital CEO Edward Solvabile (left) knows that story firsthand.