3 Reasons the Nantucket Effect Impacts the Complex U.S. Healthcare System

At the end of the day you do what you get measured on. Nestled in one of the world’s most beautiful islands, rural Nantucket Cottage Hospital has become yet another example of how simple decisions by powerful people can negatively impact the complex healthcare system. What is going on? Under a complex Medicare hospital payment system, Nantucket Cottage’s rural designation has allowed the state of Massachusetts’ 81 other hospitals to collect an estimated $367 million annual bonus.

Nantucket Island, 2004 (Photo Courtesy of Wikipedia)

Everyone is playing (conveniently) by the rules

A Medicare rule says a state’s urban hospitals must be reimbursed for wages paid to doctors and staff at least as much as rural hospitals. Since Massachusetts has only one rural hospital, Nantucket Cottage sets the floor for wage reimbursements across the state. Nantucket is expensive so those wages are high, and the 49 other States in the U.S. get lower funding since the pool of money is not infinite. Not cool and not having a positive impact on the health of others.

Doing the right thing vs. what you get measured on

The story is simple but the impact on the healthcare system is complex. Powerful stakeholders not breaking any laws or rules and dedicated to helping people feel better are simply doing

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what they get measured on. Politicians, CEO’s of large healthcare systems, doctors and nurses working at hospitals, and everyone in between are not doing the right thing because they are not good at making decisions in such a complex system.

Alone together

It is easy to point out what is wrong with the healthcare system. So much more challenging is offering a solution. Many individuals are offering solutions. Many of these individuals are connected to one another and some are not. Alone together! Are you a disruptive innovator? Can we improve the decisions we are making in a complex healthcare system?


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