Texas Hospital Merger Cancellation is a Good Thing

The patient tower at CHI St Francis in Grand Island (NTV News)

New Orleans       Hospitals are having some problems these days.  The Republican attacks on the Affordable Care Act meant that fewer of the uninsured that desperately needed health care can find – or finance – their way into hospital beds.  At the same time ACA and the attention during the health care debates did lead to some increased scrutiny about bill-padding and other concerns.  Local 100 United Labor Unions and ACORN International also paid close attention to the requirements in the ACA introduced by Iowa’s Republican Senator Charles Grassley of all people that focused on the number of hospitals that enjoyed tax-exempt nonprofit status but were the opposite of charitable.  With the help of interns from Tulane University and the University of Ottawa, our research into the IRS 990s of the nonprofit hospitals in Texas, Arkansas, and Louisiana found that many institutions were miserly despite their status.

All of which brings us to Houston’s giant nonprofit Memorial Hermann and Dallas’s huge Baylor Scott & White nonprofit chain.  Neither of which were really responsive to our requests for meetings, despite the requirements under the Act that they accept community input.  Nor were they willing to meet about their under-par charitable giving.  Their announcement last fall that they were entering discussions to merge, seem to us a step towards making a bad thing worse.  We took their announcement that the merger was off as good news.  A merger might have made them unassailable, so now when they remain separate, they will simply continue to be unaccountable.

These are big boys among hospitals nationally, not just in Texas.  “Baylor Scott & White had $582 million in operating income on revenue of $9.5 billion, according to financial disclosures to bond investors. Memorial Hermann closed the fiscal year with operating income of $129 million and revenue of $5.3 billion,” as reported by the Wall Street Journal.  If the merger had been consummated, they would have been even larger.  To the hometown paper, The Houston Chronicle, Memorial Hermann was as close-mouthed as they were with us about their charity care, issuing a statement full of platitudes.  Sources elsewhere claim the discussions went south when Memorial Hermann balked at the level of cutbacks in operations.  Who knows?  Who cares?

For all the talk about consolidation in health care being a good thing and supposedly delivering economies of scale, none of us have seen that happening in reality as health care costs continue to increase across the board.  Another word for such combinations is monopoly, and that’s not good for any of us.

The Federal Trade Commission should be all over these attempts to corner markets in hospital care, but they seem asleep at the switch in healthcare, just as they have been in supervising tech for example.  This merger may have caved under its own weight, but others have been completed around the country, and no one seems to be jumping in front of this train.

We’re not the only ones that are worried, either.  Reporting on these mergers, here’s a quote from the Wall Street Journal:

Dignity Health and Catholic Health Initiatives closed a merger last month to create the 142-hospital CommonSpirit Health. Last year, Aurora Health Care and Advocate Health Care formed a regional giant spanning Illinois and Wisconsin and Bon Secours Health System Inc. in Marriottsville, Md., merged with Mercy Health in Cincinnati.  One downside of the consolidation is it has given some large systems the size to raise prices and stymie efforts to reduce health-care spending. The deals can also result in patients being steered to specialists inside the systems, even if an outside referral might provide greater benefit.

See what I’m saying.  Just because they are claiming tax-exemptions, don’t make the mistake of believing they aren’t all about the dollar.

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Please enjoy Existential Frontiers by White Owl Red.

Kim Lenz’s Bury Me Deep.

Thanks to KABF.

 

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How Do Make Specialized Healthcare Accessible and Affordable?

Frederick G. Banting and Charles Best who discovered Insulin

New Orleans    In this brave new world of medicine involving stem cells and gene therapy, all of which were almost unimaginable in the past, we still are hitting our heads against the wall at the inability to craft a solution to the old problem in the United States of equal access and affordability.  Doctors are estimating the price tags on some of these treatments could hit up to $1 million in our current system.  Lacking universal health care in the United States that spells death and disaster for many families in the 99%.

When the FDA approves a treatment, especially if it is the only one likely to be effective, similar to the sickle-cell disease effecting so many in lower income, minority neighborhoods, government and private health care insurers face an moral obligation to provide the coverage and pay the bill.  We’ve been seeing too many stories of pharmaceutical companies jacking up the bill for rare medicines with limited manufacturing capabilities and forcing insurers to pay or families to do without.  Insurers, drug companies, and even government health officials since the Affordable Care Act fights have danced around so-called “death panels” or anything that might seem to impose price ceilings or the rationing of care, leaving us sucking air for a solution.

Michael Sherman, the chief medical officer of Harvard Pilgrim Health Care in Massachusetts, has made the case in Scientific American that under the existing regime something that might work would be a value-based agreement between institutions, drug companies, and insurers for new drugs.  The essence of the agreement is that if it works, they get paid their demand price, and if it doesn’t work, they are paid a substantially lowered price.  Sherman wonders if such agreements might work for gene therapies as well.

It seems a stretch.  Yes, making the companies prove their mettle is appealing, but it doesn’t deal with the issue that companies are setting exorbitant prices for any and all drugs in the first place in the US, the likes of which we see nowhere else in the world.  For example, the inventors of insulin donated the patent, rather than enriching themselves, but drug makers now charge $200 to $300 a vial for this lifesaver, many decades after its discovery.  It is hard to imagine gene therapies that depend on doctors, drug companies, hospitals, and insurers at this point would be able to come to a reasonable agreement that would make such treatment affordable to all.  I would have more hope for Congress!

Like it or not, it is hard to avoid the root question even as many speculate on how far they can climb out on the branches before falling:  we need universal health care protection for all Americans!  Without it, specialized drugs and path-breaking gene treatments, will make hospitals the new playgrounds of the rich, while the rest of us suffer and die.

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