Theater expansion and (its relation to) hospitals

While doing some Sunday reading (finals are over!) to avoid digging my car out of the 20.4 inches of snow we received in Columbus, I came across an interesting article in the New York Times on regional theater expansion.

Expansion has been on my mind lately. Evidently it’s been on theater people’s minds, too. “In recent years many of the 75 companies that form the League of Resident Theaters have looked at their aging or unaesthetic homes and joined what amounts to a nonprofit theatrical building boom. Since 2000 they and other institutions coast to coast have initiated dozens of construction projects whose combined tab is approaching $1 billion.”

Here’s the kicker, though: “What’s less evident is what it really means to operate them once they’re built.” Operating budgets doubled or nearly doubled for the new/expanded theaters. “But donors who have put their names on the cloakroom or water fountain may be tapped out when it comes time for the boring old annual fund. And annual funds are distressingly annual.”

But it’s lurch, and when one is in a lurch, one needs to find a solution.

But the companies are stuck in an economic bind. Reasonably enough, directors want the opportunity to stretch their imaginations with the latest technology, performers want dignified work conditions, and audiences want seats whose springs don’t threaten to give them tetanus. If the theaters don’t address these issues, they will stay small. If they stay small, they have to raise their prices; if they raise their prices, they risk losing new audiences; if they lose new audiences, they don’t have a future.

Change some words and all of the sudden it’s applicable:

But the hospitals are stuck in an economic bind. Reasonably enough, boards/administrators want the opportunity to stretch their imaginations with the latest technology, providers want dignified work conditions, and patients want care whose delivery components don’t threaten to give them tetanus. If the hospitals don’t address these issues, they will stay small. If they stay small, they have to raise their prices; if they raise their prices, they risk losing new patients (and old alike!); if they lose new patients, they don’t have a future.

Raising prices is easy to do.  Raising reimbursement levels is the problem and is highly unlikely in the current environment.  So what does everyone do to compensate? Increases utilization. What does increased utilization do? Moves us from spending a lot on health care to a lot more. Expansion and growth are part of business. All I’m advocating for is a little foresight.

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