Money over mission at non-profit hospitals
Charlotte institutions make billions, but patients can suffer
04/22/2012 12:00 AM
04/21/2012 7:50 PM
In many ways, Charlotte’s hospital systems are a model for businesses – both non-profit and for profit.
Carolinas HealthCare, once a small, struggling operation, has become one of the top hospital systems in the country. Novant Health, owner of Presbyterian Hospital, has grown into a powerful and respected health care provider. Their successes have come thanks to an aggressive philosophy of accumulation and growth, which has led to patients in the Charlotte region having access to the latest in medical technology and research, as well as top doctors in a diversity of medical fields.
But that accumulation has contributed to the high cost of health care in North Carolina, and that growth has caused the hospitals to stray at times from their non-profit charitable mission. A Charlotte Observer and News & Observer investigation that begins today details how a hunger for money and power has caused the two hospitals to sometimes lose their way, contributing to the region’s health care cost woes and leaving thousands of patients with financially crippling bills.
Today’s report reveals that the Charlotte hospitals have some of the highest profit margins in the nation, gained in part from charging prices on drugs and procedures that are marked up to 10 times above costs. Hospital officials say that’s necessary to pay for overhead, but revenues also are padding the billions the hospitals have in reserves. Some of that money goes toward expensive new equipment and technology, creating a cycle that contributes to soaring premiums from insurers, who have little choice but to cover hospitals that dominate the N.C. market.
And for those patients with inadequate or no insurance? Later this week, the investigation will detail how the hospitals doggedly pursue collections – and, in Carolinas HealthCare’s case, lawsuits – against patients who struggle to pay four- and five-figure hospital bills. These are not patients who are choosing unnecessary surgeries. They are working people unlucky enough to have a medical crisis and now facing liens and long-term debt. Some have even taken to painful and dangerous home remedies to avoid additional medical expenses.
The tug for hospitals is this: To continually provide the best care for patients, insured and uninsured, you need to make enough money to keep pace with what customers demand and what the future will bring. Profits aren’t a bad thing in themselves, and hospitals rightly point to the hundreds of millions they spend on assistance for uninsured patients, as well as unprofitable but necessary expenditures like a proposed psychiatric facility CHS wants to build in Huntersville.
But hospitals, like any non-profit, need to find a balance between mission and the bottom line. When you have more than a billion dollars in reserve, should you be suing households with little income for $40,000? When you receive millions in tax breaks each year, should you be charging four times the cost of a CT scan, thereby contributing to rising health care costs for the sick and healthy?
If Carolinas HealthCare and Novant don’t ask themselves these questions, legislators should do so. The Observer’s investigation will reveal that while other states offer patient protections, including transparency in pricing and easier access to charity care, North Carolina falls woefully short in requiring that of its hospitals.
That should change. We’re thankful that Charlotte boasts some of the best health care in the country. But our non-profit hospitals can also take greater care in remembering more often that their mission includes not only their bottom lines, but ours.
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