WARNING: For-Profit Hospitals Can Endanger Your Health and Finances

by Justine McCabe and John Battista
Published originally in the Litchfield County Times

As Connecticut considers converting Sharon Hospital into the State’s first for-profit hospital, it is important to consider the impact of such a conversion on quality of care and cost of medical services.

The New England Journal of Medicine's 1999 review showed a 7 percent increase in death rates in for-profit hospitals over not-for-profit hospitals. Similarly, the April, 2000 issue of the Journal of General Internal Medicine revealed that patients at for-profit hospitals are two to four times more likely than patients at not-for-profit hospitals to suffer adverse events such as complications following surgery.

These results are thought to be a function of the 16 percent reduction in spending on clinical personnel, such as RN's, at for-profit hospitals. This reduced spending is not surprising given the primary responsibility of for-profit hospitals to maximize shareholder profit rather than quality of care to patients.

Ironically, despite decreased spending on clinical personnel, for-profit hospitals actually cost more than not-for-profit hospitals. A Harvard study of 5201 acute care hospitals reported in the New England Journal of Medicine in 1997, showed that the same procedure or illness cost on average 8.3 Percent more at for-profit hospitals than not-for-profit hospitals.

These increased costs are primarily the result of for-profit hospitals spending 23 percent more on administration than comparable not-for-profit hospitals. Moreover, repeated convictions of for-profit hospitals for billing fraud suggest that some of these costs may be the result of for-profit hospitals "upgrading" diagnoses to maximize payments.

For example, Columbia/HCA, the largest for-profit hospital corporation, was fined $745 million for billing fraud and its CEO sentenced to two years in jail; and NME (Tenet) was fined $683 Million dollars for billing fraud and patient abuse.

Whether or not they are aware of the adverse impact on health and cost of for-profit Conversions, many Sharon residents support the for-profit conversion of Sharon Hospital because they perceive this is the only way to keep their local hospital open. Yet, realistically,they can expect that only the profitable services of the hospital will be kept open-and only to patients who can afford to pay for them.

Thus, experience from other for-profit conversions predict that a future, for-profit Sharon Hospital would close non-profitable services and send those unable to pay to other, no-for-profit hospitals. A better solution to these hospital crises would begin with providing universal health insurance for all Connecticut residents.

In fact, the "Connecticut Health Care Security Act," which will be considered by the state legislature in the upcoming session, would do just that. Under the health care trust created by this bill, a global budget for Sharon Hospital would be negotiated based on a comprehensive assessment of services best carried out at Sharon Hospital and those better provided by other area hospitals. Only then could a rational determination be made of the value of local access to health care for all residents, rather than only those wealthy enough to pay for it. Only then would patient care—not corporate bottom line—be the guiding priority for these decisions that affect us all.

John R. Battista, M.D. and Justine McCabe, Ph.D. are Coordinators of The Connecticut Coalition for Universal Health Care. They live in New Milford.

TPL_BEEZ2_ADDITIONAL_INFORMATION