Hospitals Have Room to Improve
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Happy Thursday Healthcare Advocates
I would like to encourage comments and suggestions from you if you have time. If there is a special topic you’d like to see please let me know. Please use the comment button below.
Yesterday was a research and preparation day. We have several public presentations on Universal Healthcare in Washington in July. Of course, most of the data is from the newsletter. As they get close I will post the links if you’d like to join.
Hospitals - A Hot Mess
I received a query recently regarding what happens when a private equity firm purchases a public hospital. We wrote about this a little while ago. Here is a link to that article.
The pattern is fairly repeatable. When the private fund purchases the hospital they have a goal to make a profit. Let’s remember there are a few ways to do that. You can increase prices, you can lower expenses, you can sell profitable services to an increased customer base.
It is hard to increase your customer base. So lowering expenses and increasing costs are two good places to start.
Find the departments that make money, keep them. Find the departments that lose money, outsource them or stop offering those services. This is common. A number of hospitals no longer offer labor and delivery if enough people in the neighborhood aren’t having children, or who can pay for it. You can reduce expenses by overloading doctors and nurses. We see this all the time when nurses go on strike. We have had several this summer in the Pacific Northwest.
One ambitious new hospital owner made every department a separate company. They even created a company to own the physical hospital and rented the facility back to their own company that operated the hospital. Very creative, but at the end of two years all the profit was squeezed out and the hospital was ready for bankruptcy. The owners had already made their money. Oh, there is a special name in the industry for this - Vulture Capitalist.
Non-Profit or For Profit
I am asked whether for profit or non-profit is better for a hospital. Today the split is about almost 50/50, there are some government hospitals in the mix. Here is a link to the American Hospital Association’s site and they list the number of each type. I think the problem is whether the non-profit is actually masquerading as a for profit venture. They make a similar amount of money as for profits and you have to look at how they spend it and how greedy they seem to be. Here is an example. Kaiser Permanente is a very large non-profit and yet they are the subject of a Department of Justice investigation regarding overcharging the government (a crime) for at least $1 billion on Medicare Advantage plans. Greed and Healthcare don’t mix well.
Anyway, the first for profit hospitals came about in 1968 with advent of Medicare in 1965. It was Hospital Corporation of America (HCA). They are still in business and have an incredibly sordid corporate history. Here is a link to some of that history in a video and a Wikipedia link. They make about $3.7 billion/year on revenues of about $60 billion and have about 235,000 employees.
When they started Medicare agreed to pay for profit hospitals a 1.5% profit and a 2% facility fee on top of fee for service payments. 3.5% is a lot of profit. The Frist family bought up hospitals right and left and made a killing on the free profits that were provided by the government. When Medicare billing rules changed to pay certain amounts for certain diseases, like heart attack, they focused on the most profitable illnesses and sent other patients elsewhere. This is what happens when you view the healthcare infrastructure as a cash engine instead of healthcare system. It gets a little more sordid. One of the Frists was Senate Majority leader and pushed through legislation that would benefit for profit hospitals like the one his family developed.
The company engaged in illegal accounting and other crimes in the 1990s that resulted in the payment of more than $1.7 billion in federal fines and other penalties, and the dismissal of the CEO Rick Scott by the board of directors. Here is a link to the Department of Justice report. Part of the criminal activity was paying kickbacks for patient referrals, over-billing Medicare and other fraudulent activities.
Fun Fact. The CEO at the time was Rick Scott. Yup, the current Senator from Florida who says that if you’re a socialist or a communist you’re not welcome in Florida. The same one who wants to be President. BTW, he was fired at HCA for overseeing this criminal behavior.
This kind. of behavior is wide spread in healthcare organizations and is a cultural artifact of “make as much as you can” instead of make people as healthy as you can. Here is another example, one hospital noted that they could bill insurance an extra $3000 for labor and delivery if a pregnant woman showed up in the ER instead of the front door. A memo to staff urged them not to leave that money on the table but be sure to code and bill for the ER.
Lesson
A lot of people work very hard to squeeze as much as they can out of the healthcare industry. Universal Healthcare won’t fix everything but using global budgets for the major hospitals and networks and facilities will help. Help
ACTION
Tell your Representative and Senators in Congress and the President it is time to pass Universal Healthcare, HR3421 or S 1655. Their contact info is in the reference section below or text SIGN PLBNXJ to 50409 on your cell phone to use RESISTBOT to send the message below.
I am your constituent. I am so tired of reading about how Hospital Chains like HCA or Kaiser Permanente and so many others have cheated the government. Improved Medicare for All will use global budgets for such facilities to help keep them well staffed and maintained and their patient populations healthy without an incentive to cheat. We need help to do this and I want you to help.
Find My Elected Officials
Contact the White House https://www.whitehouse.gov/contact/
Contact State and Federal Representatives
https://www.commoncause.org/find-your-representative/addr/
Important Healthcare Resources
League of Women Voters Healthcare Reform Toolkit
Our Newsletter resources including reproductive healthcare
Healthcare Advocacy Reading List
Organizations to Contact
NARAL - Pro Choice America
Planned Parenthood
Physicians for a National Health Plan
Claims Denials and Appeals & What to Do
Appeal a Healthcare Decision
Appeal/Negotiate a Hospital Bill
Save Democracy
Chop Wood, Carry Water by Jessica Cravens
RESISTBOT
Link to the RESISTBOT site to learn more
Link to Chop Wood, Carry Water Resistbot write up