In the Tampa Bay Times, Letitia Stein writes about a local independent not-for-profit hospital that’s struggling financially and may be looking for a buyer. In some ways, it’s more business story than health story, but Stein relied heavily on the same public financial documents that AHCJ members use regularly, and fleshed them out with the help of familiar sources.
Bayfront’s financial statements help explain the interest in a partnership. In 2011 and 2010, its operating margins, key indicators of its core patient-care business, were razor thin — less than 1 percent, state records show.
In 2009, the operating margin — the difference between patient-care revenues and costs — was $4.8 million in the red.
To add context to those numbers, Stein talked to local and national experts on the business of health care. For example:
“It seems to me the biggest challenges are how to survive when revenues are barely growing and (Bayfront) has a very large Medicare and Medicaid share with few privately insured (patients),” said Mark Pauly, a professor of health care management at the University of Pennsylvania’s Wharton business school, who reviewed Bayfront’s 2011 state financial filings.
The story itself is a snapshot of why independent not-for-profit hospitals are an ever-rarer breed, but more importantly, it’s an example of how a well-trained health journalist can take a straightforward business story and tie it into the larger narrative of a region’s health care ecosystem and economy with the help of the right documents and sources.
AHCJ tip sheets
The Turkish government has begun to select bids for the first of a “large number” of major hospital projects, estimated at $5 billion over the next five years.
The first is the Kayseri Health Campus, in central Turkey, to include a 1,300-bed general hospital, with 200 mental health beds and 100 high security forensic mental health beds, in a facility serving a city of almost 1 million people and a surrounding area with another 1.8 million. But the Turkish government has opted for a system of financing based on a model that is causing major problems for hospitals in the United Kingdom. Continue reading
A story by Boston Globe reporters Scott Allen and Marcella Bombardieri questions the provision of nonprofit status for hospitals and the tax breaks that come with it, vestiges of a time when hospitals needed financial incentives to treat the nation’s poor.
They look at Massachusetts hospitals pulling in billions of research dollars and making liberal use of their tax incentives. An intensive review of relevant records revealed that the value of these tax breaks far exceeds the value of the free care the hospitals provide for the poor, the reporters say.
The 10 leading hospital companies benefited from an estimated $638 million in federal, state, and local tax breaks as well as state discounts on borrowing in 2007, the latest year for which complete data are available. More than half of that goes to two large and growing companies, Partners and Children’s Hospital. Overall, the 10 hospital companies’ tax breaks and other benefits were worth $264 million more than the value of the “community benefits” – care for the poor and other charity work – they reported to the state attorney general that year.
The reporters also note that Massachusetts health care reform has helped increase the gap; hospitals now provide half as much free care as they did before reforms were instituted (Today, about 1 percent of patients don’t have to pay). In the midst of a climate of tight budgets and potential reforms, a group of politicians led by Republican Sen. Charles Grassley of Iowa is calling for rules holding nonprofit hospitals to higher standards of charity work than their for-profit peers.
The in-depth story digs deeper into potential reforms and issues and paints a detailed financial picture of the impact the nonprofit status of major hospitals is currently having on the state’s budget.