Overhaul greedy hospitals

by John Pendergast, health care consultant, published in Charlotte Observer, February 1, 2014.

“One.” It’s a catchy slogan. It’s the number of our quarterback. It is not a coincidence that Cam Newton and Carolinas HealthCare System have teamed up on a major advertising campaign. What does it take to be “One”? For months now you have read in the Charlotte Observer and (Raleigh) News & Observer – and also Time, 60 Minutes, the New York Times, Wall Street Journal and many other media outlets – about hospital executives in North Carolina and nationwide raking in huge profits on the backs of patients and the employers who provide and pay for health insurance to these patients.

You’ve read that hospitals are paying their executives millions of dollars annually, with country club memberships, daily catering services, use of auto and air fleets and other perks. You have read that hospital systems are overcharging cancer patients for their chemotherapy drugs and that these systems have bought up oncology clinics, which has monopolized cancer treatment resulting in higher profits and increased financial burden for these patients.

You’ve read that hospital systems are buying up cardiovascular physician offices and moving standardized tests to hospitals and making 200-400 percent more on each stress test and electrocardiogram. You’ve also seen the blatant disregard for financial stewardship by hospitals increasing charges 10 percent year over year, excessive advertising with sports teams, billboards, TV commercials, radio ads; excessive purchasing of real estate, questionable construction and remodeling projects; and increasing the community’s focus on high-cost care by overemphasizing emergency treatments and expanding emergency rooms.

You’ve seen hospitals build urgent cares and physician offices next to competing hospitals, taking patients away, which drives up health care costs and further monopolizes care.

This is all evidence of greed by hospital CEOs and CFOs. This behavior goes against everything doctors and nurses stand for. It goes against the Hippocratic Oath. It goes against common decency, fair play and ethics. It should be illegal, but it is not because the hospital lobby rules Raleigh, Washington, and almost every state capital. Everyone knows it, the governor, the president, the DOJ, the AG, the OIG, the FTC – everybody but the patient. Patients are facing bankruptcy. Employers are struggling to pay medical bills and insurance premiums. States are having to divert funds to cover excess medical costs of their state employees.

Many hospital systems have reaped huge profits without considering the negative impacts on the physical, mental and financial health of their patients and their employers. It’s time for a change. It’s time for morality, ethics and patient quality of life to dominate the health care market.

The responsibility of a healthy population resides with the community and should be spearheaded by the community hospitals. That means that hospital systems should do everything in their power to have the healthiest population, to deliver services at the lowest possible costs for both patient and their employer. It is the responsibility of the hospital to get all patients to the lowest-cost setting with the highest quality of care.

Every dollar made by every hospital in the U.S. should be used for this cause and this cause alone. Build a free clinic, wellness center, vaccination center in every ZIP code in your area. Build ambulatory surgery centers to keep costs low and quality high. Lower your charges 10 percent every year to compensate for the past decade of greed. Partner with other independent physician groups and hospital facilities to ensure the lowest possible cost for the highest quality of care. There should never be a CHS vs. Novant or a UNC vs. Duke because you are both responsible for making sure that our population is healthy. If anything, you both should be collapsing resources and removing the excess and fat from your budgets. You should be sharing patients and helping each other with research, technology and innovation.

Instead of buying oncology and cardiovascular clinics and overcharging for services, hospitals should partner with them and pay for the equipment to ensure that the service is rendered at the lowest cost. Hospitals should function at a 3 percent net profit and never sue a patient for any amount over the Medicare allowable. Advertising budgets for non-profit hospitals should be cut by 90 percent and regulated by the government. Hospitals should partner with all employers to make sure that each service is rendered at the lowest possible cost with the highest health outcome. Hospitals should send nurses and wellness coordinators to their local employers for free every month to keep costs low and health high.

It’s time for a major overhaul of hospital systems in every state. I want North Carolina to be number one. That would mean CHS is not ‘one’ but many and that the patient will always be No. 1, with their employer. We can not rest until North Carolina is ranked No. 1 in citizen health, No. 1 in lowest health care costs per patient, No. 1 in lowest medical costs for employers, and No. 1 in nurse/physician to patient ratios. So Pat or Roy or whoever our next governor is: This should be your priority No. 1.

John Pendergast has 15 years experience in the health care industry. As contract manager and claims consultant, he helped self-insured companies and patients reduce their health care costs.