Security dealers and integrators who sell to and service the healthcare market can attest that the market itself is very cyclical — much like the economy, when it comes to funding, the healthcare market runs in peaks and valleys. In the past few years, hospital and other healthcare-related security departments have enjoyed a “peak” — the funding was flowing for new construction, security technology retrofits and guard services.
However, those same security departments are now running into a major funding roadblock: the Affordable Care Act (ACA), otherwise known as Obamacare. As the details of the President’s sweeping healthcare reform remain murky, hospitals and healthcare-related facilities are holding tight to the funding they have and curbing spending wherever possible — and the ripple effects of those decisions are now reaching the security dealers and integrators.
“The biggest thing with Obamacare is the unknown — hospitals don’t know exactly what the implications are on this, so they are holding back on their funding,” explains Marilyn Hollier, CHPA, CPP, who is the Director of Hospitals and Health Centers Security for the University of Michigan Division of Public Safety and Security. She is also the current president of the International Association for Healthcare Security & Safety (IAHSS).
While it is true that Obamacare is having an enormous impact on security integrators’ opportunities for healthcare market expansion, there are still ways to circumvent the lack of funding; and it remains very important to keep a strong foothold in the healthcare market for when the cycle again turns 180 degrees.
While nothing quite like Obamacare has ever been attempted by the executive or legislative branches of our government, adapting to the whims of government-level regulation is nothing new for the healthcare market. Most recently, the Medicare program saw a major overhaul in 1997, when President Bill Clinton signed the Balanced Budget Act, which tightened payments to doctors, nursing homes, home health agencies and health insurance plans and expanded the types of private plans that could participate in Medicare.
“There was a big knee-jerk response back then of hospitals combining forces, offering early retirement, just trying to find ways to make up for the money they weren’t going to get,” Hollier recalls. “Then they found out there was a lot of fat they could cut.”
Since then, the theme of being more efficient has pervaded the healthcare industry, including the security departments that oversee the facilities. “There has been a big shift from manpower to technology,” says Ben Scaglione, director of healthcare security services for G4S, which provides healthcare security integration and contract security services to nearly 160 hospitals across the nation. “Today, (security dealers and integrators) need to be more effective in how they consult and design systems for the end-user. They have to work in harmony. It’s not necessarily ‘I can come in and put up 10 cameras and replace that security officer’ — it’s more ‘how can we work together to provide a safe and secure environment.’
“Some hospitals we’ve gotten contracts with (in 2013) really saw the writing on the wall and were proactive,” Scaglione continues. “Some have replaced their in-house security departments with contract because it’s cheaper; others are looking to be more effective within their security departments and have come to us to really evaluate their security systems and have used us to supplement or replace their existing in-house departments. Cost is a real big deal.”