By Grace Vitaglione, Carolina Public Press
Staff cuts have boosted patient care profits at Mission Hospital in Asheville after HCA Healthcare acquired the facility, according to a draft report by Mark Hall, director of the health law and policy program at the Wake Forest University.
The report tracked the hospitals’ profits from 2011 to 2022 and compared their profit margin to 11 similar hospitals. HCA acquired the then-nonprofit Mission Health System in 2019. During the height of the COVID-19 pandemic in 2020, the hospital posted losses, according to Halls’ report.
But Mission Hospital recovered, and in 2022, it reported patient care profits of nearly $100 million, about 3.5 times its profits in the year before the HCA purchase, the report said .
HCA reduced patient care costs by reducing the patient care staffing ratio from 6.0 full-time equivalent staff per occupied bed in 2018 to 3.7 in 2021, according to the report. Meanwhile, the average staffing at other North Carolina hospitals remained at 5.1 per patient, according to the report.
The report used data from hospital cost reports submitted to the federal government. Hall compared Mission to similar hospitals based on size, scope of service and market and geographic location.
That comparison is how Hall found that staff cuts were the main driver of Missions’ profits under HCA, he said. Before the acquisition, Missions’ patient care profit margin was on par with the average for peer hospitals, but its profits are now at the top of the range, according to the report.
We know that this is not mere correlation, that the purchase of HCA appears to be the real cause of this change, Hall said.
Increase in prices and profits
Price gouging is another way to make a profit, but HCA has limited control over that, Hall said.
Many of Mission Hospitals’ patients are covered by Medicare or Medicaid, in which the government essentially sets prices, according to the report. Blue Cross and Blue Shield of North Carolina also has a large share of the private insurance market, according to the report, giving the company leverage to fight price gouging.
For those who don’t fall into those categories, such as those with smaller insurance companies or the uninsured, hospitals can mark up prices, according to the report.
Mission raised its prices by an average annual increase of 16 percentage points between 2011 and 2018, according to the report, but that doubled under the HCA to an average increase of 33 percentage points annually. That put Mission at the top of the peer hospital range, according to the report.
North Carolina plaintiffs also filed price-gouging complaints in antitrust suits against HCA.
However, most patients do not pay the full amounts, the report found, so this does not account for most of the increased benefits.
“Wishful thinking” about benefits
Prior to the acquisition, Mission board members appeared to believe, based on what they had been told, that HCA would improve financial performance through administrative efficiencies and cost savings on things like supplies, according to the report.
Although good data is lacking to isolate this, these areas are unlikely to be the main source of savings, according to the report. The mission reported that much of its total spending was concentrated on labor costs in a certificate of need application submitted to the state in 2022, according to the report.
Asked by the Carolina Public Press if board members were misled about HCA’s plans for Mission, Hall said: It certainly appears to be wishful thinking.
Michael Messino, a retired physician who founded Messino Cancer Centers, is part of a coalition of advocates and elected officials following the developments at Mission Hospital. He said HCA will never be able to fix problems at the hospital because their profit-driven model means they are unwilling to hire enough staff.
Messino also pointed to the salaries of HCA’s top managers. CEO Sam Hazens’ total compensation in 2023 was $21,315,984, according to a proxy statement for an annual meeting of stockholders filed with the U.S. Securities and Exchange Commission.
Union negotiations
National Nurses United union members are currently negotiating a new contract with HCA, including at Mission Hospital.
Hannah Drummond, a Mission nurse and union member, said the main goals of the negotiations are to increase staffing and retention, meal and rest breaks and protections for how technology is implemented in the hospital.
Even if a Mission nurse is not in the union, negotiations will affect them, and union support among staff is high, she said.
We feel very good going into these contract negotiations, to push them to do what is right, he said.
The mission met with union bargaining representatives at the table once and will do so again on Friday, May 3, Drummond said. Because it’s still early in the process, they haven’t reached any tentative agreements yet, he said.
The current contract expires July 2, and if HCA doesn’t negotiate in good faith to reach an agreement, a strike is a possibility nurses would vote on, she said. If that happened, the union would give 10 days’ notice so the hospital could plan patient care.
The hospital has been telling management that the union is going on strike, he said, but whether or not there is a strike is up to the HCA.
If they’re spreading that message around, that tells us they really don’t intend to negotiate in good faith, he said.
Union protections have allowed nurses to raise concerns, which has led to accountability measures taken by the government, Drummond said.
All these stories are told because we became union nurses who formed our union here, and we’ve been ringing the bell and blowing the whistle, she said.
HCA answer
In response to whether the hospital is telling management that the union is going on strike, HCA spokeswoman Nancy Lindell wrote in an email: We have just begun contract discussions and know that the strikes are a possibility in any labor negotiation and this negotiation is not. different.
“The hospital is prepared in the unfortunate event that the union calls a strike, as is known by National Nurses United.”
Lindell wrote about Halls’ report: This writing was funded by a group that is funding litigation against Mission Health. It is not an unbiased study, and warrants no comment or response.
Halls’ work is funded by a grant from the philanthropic group Arnold Ventures at Wake Forest University. Arnold Ventures also supports some impact litigation, according to the report, including a public interest law firm currently suing HCA Mission over antitrust matters.
Hall said the research team has no connection to the litigation and that Arnold Ventures has no control over or input into the report.
Editors’ note: Carolina Public Press has also received general financial support from Arnold Ventures, as it does from many philanthropic groups. This funding in no way influences the content of CPP’s journalistic efforts, including this article.
This article first appeared on Carolina Public Press and is republished here under a Creative Commons license.
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