*Dr. JWW Plan for Elective Hosp Looking under the hood of our uniquely American hospital system

by faithgibson on December 8, 2015

Coped to print 12-13-2020 Big Apple folder “ToPRINT”, etc; file name: DrJWW_Look-under-hood-Am-hosp-system_12-13-2020

April 25, 2016

Looking under the hood of our uniquely American hospital system

What is unique about our a nationwide system of privately-owned general hospitals is the financial strategy required to achieve this worthy and ambitious goal in spite of the AMA’s opposition to anything that smacked of federal funding.

So how did it get off to such a good start without any kind of government financing?  This extraordinary achievement was not just a historical fluke but a purposeful strategy developed and implemented in the early 1900s. It was specially configured to do an ‘end run’ around the barriers erected by organized medicine that rejected any form of government financing that might displace or weaken the entrepreneurial model of private ownership of medical services and medical facilities.

This plan was specifically chosen for its ability to generate a steady and dependable revenue stream at a level of profitability that it would allow each hospital to build up their economic reserves. This revenue would then be used to upgrade, remodel or build new and better facilities, and expand their ‘market share’ by adding outpatient services and several other income-generating activities associated with the hospital services.   This strategy successfully generated a revenue stream of the size and consistency needed to achieve its goal in as short a time as 30 years.

@@@ tag –> electively hospitalizing healthy patients from the middle and upper-classes as paying customers.

April 25, 2016

An unfortunate side-effect is that what we call “health care” is a tragic misnomer — it is neither focused on preserving and protecting health nor is it fundamentally about ‘caring’ but instead a variety of fee-for-services activities that take care of some aspect of the patient’s disease process.

The allopathic medical system is a disease-management, sickness-care system. As stated many times already in this prolog, the ability of modern medical science to save life, limbs, sight, hearing and many other aspects of normal biology by curing formerly fatal or painful diseases and injuries, and to reduce suffering is extraordinary and wonderful. None of us — especially not me! — wants the wonder of medical science to go away for any reasons. But it is not ‘health’ care: Health care is a preventative process that aims to preserve and protect the health of already healthy people, to prevent the development of chronic diseases, to employ a number of non-allopathic strategies to halt the further deterioration and reduce harm in those who develop chronic diseases and

But dispensing medical, surgical and pharmaceutical treatment to sick people it is not ‘health’ care: Health care is a preventative process that aims to preserve and protect the health of already healthy people, to prevent the development of chronic diseases, to employ a number of non-allopathic strategies to halt the further deterioration and reduce harm in those who develop chronic diseases and

@@@@@@@@@@ New business model // new image // every health former pt a walking talking advertizement for hosp. services @@@@

Dr. JWW’s ideas for a nation-wide system of fully-equipped community hospitals reflected the ‘can-do’ enthusiasm of a time of rapid change in America during the decades leading up to the ‘roaring twenties.’ Combined with his own personal and professional background, he was undeterred by the mismatch between the dismally inadequate finances of most sick people and the high cost of their hospital bills, as well as the medical profession’s non-negotiable rejection of ‘government’ interference.

Clearly this was a daunting challenge, but Dr. Williams was optimistic and believed he had the perfect answer. He saw a bright new opportunity for 20th-century hospitals to redefine themselves and how they generated revenue by using a process now describe as ‘re-branding.’

The 19th-century idea of hospitals as passively reacting to illness and injury was to be replaced by a proactive and dependably profitable new business model. His innovative plan called for each hospital administrator to think of their institution as an actual business and start looking for new opportunities to expand their market share beyond the typically unprofitable sick patient.

Unless this outdated 19th-century model was dramatically and quickly re-configured, it would be impossible for small community hospitals that still depended on revenue from the ill and injured to remain in business. Even if they didn’t have to close their doors, they wouldn’t have the funds to modernize their facilities. Hospitals that could not afford to join the 20th century would have little of value to offer. To avoid being put out to pasture, they needed to invest in state-of-the-art x-ray machines, equip their laboratories and make the capital-intensive purchases for technologically-enhanced medical services.

Most Europeans were already receiving modernized hospital services, but state-sponsored upgrades in the US were out of the questionsthanks to organized medicine. Instead, each local hospital would each need to develop one or more low-cost, high-yield service that would generate a profitable revenue stream. To qualify these new services had to be able to financially underwrite the upgrading and expansion of the hospital’s clinical laboratory, x-ray, surgery and other income-generating services that would further broaden the hospital’s economic base.

Dr. Williams’ ambitious plan included appropriately brilliant strategy for achieving these goals. Given the limitations of the era, and seen from his professional perspective, Dr. Williams came up with the perfect economic solution — he personally invented the brand new category of ‘healthy’ hospital patient, and introduced the bold new idea of ‘elective’ hospitalization. These new market for hospital services radically changed the ‘usual and customary’ idea of hospitals by extending its services to include the new category of paying customers — the electively hospitalized healthy patients.

One obvious impediment to Dr. William’s rebranding ideas was the historical association of hospitals as places of ‘last resort’ and the ‘yuk’ factor. When thinking of hospitals, what often came to mind were distasteful images of germs, horrible diseases, tragic and disfiguring accidents and places where the very sick went to die.

Change this image posed a considerable public relations problem but again Dr. Williams was up for the challenge. He believed these negative associations could be overcome by taking full advantage of ‘modern’ medical science and new technologies and a new image of hospitals as places of renewed hope, health and the promise of new life. For financial reasons and as part of the re-branding effort, the elective hospitalization of healthy maternity patients was the perfect place to implement the new and expanded model of hospitals as successful businesses.

In this ‘new order’, hospitals embodied life-affirming characteristics in two different yet complimentary ways. The first was a happy side-effect of having a maternity ward, which allowed hospitals to be associated with birth and healthy families, instead of death after an accident or debilitating illness. The family’s joyous celebration when their baby born in the hospital’s new maternity ward was a momentous event celebrated by proud new fathers walking around with cigars.

For hospital administrators, this whole idea boiled down to one starkly simple scenario: when local families are tooling around on a Sunday afternoon in their new Model T and drive by your institution, do you want the mother to point to your hospital and say to her youngest child in an excited tone of voice: “Look, honey, that’s where you were born” OR do you want her to looked pained and say sadly: “Oh, that’s where your favorite Uncle Fred died”.

The other ‘good news’ from a PR standpoint was the significantly improved ability of ‘modern’ medical science to treat many painful diseases and injuries. This also included the giddy relief and gratitude of patients who suffered from some awful, maybe fatal disease who was miraculously cured, thanks to accurate diagnosis, new medical treatment or safe surgery. As a direct result of this patient’s successful hospital experience, he or she is able to walk out the door as a new person and look forward to a long, healthy, pain-free and physically-enabled life.

Each new mother who left the hospital with her healthy newborn and each grievous ill or injured patient discharged in a much-improved condition became the best of all advertising strategies — a walking, talking billboard for that hospital’s excellent services.

; by training and economics, medical doctors are neither prepared or interesting in being a  provider of preventative health care, nor should we expect them to do so after spending 10-15 years in training and racking up an average student loan debt of $150,000.


The able to provide comprehensive medical and surgical services in each population center. Europe already had such a system, but with very few exceptions, hospitals in the US were mostly very small, doctor-owned and run, 2-to-10 bed facilities. These for-profit business depended on paying customers and therefore offered no emergency services to the public. They also could not afford to purchase the expensive new medical  equipment (such as x-ray machines) now required to provide “modern” medical care.    He envisioned a coast-to-coast network of small and medium-sized community hospitals equipped to provide the same 20th century state-of-the-art medical services (quality if not quantity) as his alma mater, Johns Hopkins University Hospital.

In early 20th century America, there were only about a dozen hospitals that were equipped to provide scientifically-based 20th century medical treatments and aseptic surgery. Most of these big institutions were assocaited with a medical school in urban areas of the east and west coast and big cities in between. Americans who lived in small towns and farming communities daily risked dying from treatable injuries and curable diseases as they had no access to the life-saving abilities of ‘modern’ medical science.

Dr. Williams simply wanted to make modern ability to diagnose and treat serious injuries and illnesses and effectively cure previously fatal diseases available to the rest of the country. the trifecta of modern medical science — advanced understanding of the human biology, modern technologies and trained professionals

To make this new level of comprehensive medical care available in every sizable community, dozens of new general hospitals had to be built and many more existing ones has to be upgraded. Obviously this was a very expensive undertaking. However, organized medicine strenuously opposed any form of public financing — what was called “socialized medicine”. This meant Dr. Williams’ had to find a new and much more profitable business model for the American system of privately-owned hospitals.

He did this by ‘inventing’ a brand new  category of hospital patient — the ‘electively hospitalized’ healthy maternity patients. With two million births annually in the US, this greatly expanded the market for hospital services. Implementation of his plan started by convincing existing hospitals to convert unused spaces into new ‘lying-in’ wards, or for them to open a small lying-in hospital in near-by buildings. As Dr. Williams predicted, the patronage of healthy maternity patients generated profit for the institution. This in turn provided a steady and reliable revenue stream that was used to create our current system of modern, fully-equipped  community hospitals.