Correspondence
Columbia/HCA and the Hospital Business
N Engl J Med 1996; 335:1920-1922December 19, 1996
- Article
To the Editor:
Mr. Kuttner has written an illuminating two-part report on the for-profit hospital business, highlighting the dominant player in the game, Columbia/HCA (Aug. 1 and Aug. 8 issues).1 He correctly points out that not-for-profit hospitals, including university medical centers, are also changing the ways in which they operate. Chief executive officers and boards of directors of university medical centers are ever more mindful of their own bottom lines, mainly because they now have to compete with nonacademic players for the “covered lives” out there. It is understandable when Columbia/HCA puts medical education and research low on its list of priorities, but when academic medical centers make decisions that have adverse effects on their academic missions in order to maximize income over expenses, things may be going too far. I am not urging fiscal irresponsibility. Trimming costs is important and possible. It is a matter of priorities.
Medical education and research are important, as are the possible consequences of curtailing them. Just where do the Columbia/HCA administrators think all those doctors they are co-opting come from? And how do they think basic medical knowledge and its application to the care of people were developed? The answers are obvious: education and research. Neither is free, or even inexpensive, but both must be supported. If the administrators of Columbia/HCA and other for-profit hospitals do not believe these efforts are in their job descriptions, we must figure out a way to pay for them, probably by some sort of public support. Higher “sin taxes” are but one way. Higher taxes on the profits of for-profit hospitals are another.
Only if the public becomes disenchanted with managed care and the priority on profit will there be a change in the system. Meanwhile, as physicians, let us hold the high ground and take the best care of patients that we possibly can.
1 ReferencesJames B.D. Mark, M.D.
Stanford University School of Medicine, Stanford, CA 943051
Kuttner R . Columbia/HCA and the resurgence of the for-profit hospital business. N Engl J Med 1996;335:362-7, 446
Full Text | Web of Science | Medline
To the Editor:
As president and chief executive officer of Columbia MetroWest Medical Center, I want to correct some of Mr. Kuttner's erroneous assertions regarding the arrangement between Columbia MetroWest Medical Center and Columbia/HCA.
First, Mr. Kuttner states that MetroWest was “in distress” when it began the search for a strategic partner. In fact, in early 1995, when initial discussions about a partnership began, MetroWest was accomplishing a startling financial turnaround. Our rigorous efforts at cost reduction during the fiscal year ending in September 1995 turned a projected $5.7 million deficit into a surplus of over $8 million. By the time of the attorney general's public hearing on the Columbia/HCA transaction, in December 1995, HCIA, Inc., and William M. Mercer, Inc., had named MetroWest one of the nation's 100 best hospitals on the basis of both clinical and financial criteria.1
Second, Mr. Kuttner states that MetroWest was “rebuffed” by local nonprofit hospitals in its attempts to find a partner. What Mr. Kuttner neglects to mention is that the MetroWest board of trustees consistently insisted that any affiliation with another institution must embody certain principles ensuring local governance, maintaining quality, continuing the policy of unrestricted uncompensated care, and guaranteeing the survival of local acute care services for the residents of the region served by MetroWest. Discussions with local nonprofit institutions were terminated by MetroWest only when it became clear that these institutions would not or could not agree to adhere to these principles.
Third, Mr. Kuttner asserts that Massachusetts Attorney General Scott Harshbarger “intervened” in our transaction with Columbia/HCA in late 1995. Nothing could be further from the truth. We took the initiative to involve the attorney general's office less than a month after a term sheet had been signed with Columbia/HCA, in June 1995. More to the point, both MetroWest and Columbia/HCA engaged the attorney general's office in a rigorous, detailed, and very public process in which the attorney general's staff took part. We welcomed the attorney general's involvement, and I believe that the result was an excellent deal for the people in the region served by MetroWest.
1 ReferencesLawrence R. Kaplan, M.D.
Columbia MetroWest Medical Center, Framingham, MA 01702-9167To the Editor:
The recent transaction between Columbia/HCA and MetroWest Medical Center was prompted in part by the predatory behavior of academic medical centers. Partners Health Care, for example, has expended huge sums, with tax-exempt dollars, to purchase physicians' practices in Framingham, Massachusetts, as well as in many other areas 20 miles or more from downtown Boston.
Columbia/HCA's investment in MetroWest should make the facility more attractive to local residents and reduce the historically large number of unnecessary admissions to Boston hospitals from this area.
Edward L. Burke
Bowditch and Dewey, Framingham, MA 01701-9320To the Editor:
. . . No one company should dominate the nation's medical care simply because it is well managed now. IBM was apparently the best company in the world. Until it was brought to its knees, we did not know its weaknesses. Chrysler went bankrupt, and the taxpayers had to bail it out. Columbia/HCA already owns half the for-profit beds, with 340 hospitals under its control, and it wants to own a total of about 1000 hospitals. With such dominance, patient care will be thrown into chaos if Columbia/HCA's management falters.
It is sheer deception to claim that the interests of the patients and those of the shareholders in for-profit hospitals are always the same. These interests may indeed diverge. A 20 percent gross return on revenues, as Columbia/HCA demands, cannot be achieved indefinitely; cost cutting and acquisitions have limits. Ultimately, something has to give: quality or access or both.1
1 ReferencesFazlur Rahman, M.D.
3105 Ridgecrest Ln., San Angelo, TX 76904To the Editor:
Kuttner's broad statements and generalizations are inaccurate as regards Columbia Michael Reese Hospital, a teaching hospital owned by Columbia/HCA, where I am chief of surgery.
Kuttner states, “For-profits tend to avoid unprofitable services and unprofitable patients.” Columbia Michael Reese Hospital has two roles: one as a community hospital serving South Chicago and another as a tertiary care center in areas of special expertise. Last year, Columbia Michael Reese Hospital provided care for sizable proportions of Medicaid patients (22 percent) and nonpaying patients (9 percent). Even as a tertiary care center in areas of special expertise, such as the treatment of hemophilia, the hospital accepts patients without regard to their ability to pay (although we would certainly like to find ways to cut our losses). In its prior incarnation as a Humana hospital, the institution did close its trauma center because of the failure of any payer or political or social agency to reimburse for trauma care, but a number of other nonprofit hospitals in Chicago also closed their trauma centers.
Kuttner states, “For-profits sometimes `re-engineer' or downgrade their staffing, administration, and supplies.” In this statement he irresponsibly links re-engineering to downgrading. Current recommendations in the Medical Knowledge Self-Assessment Program of the American College of Physicians suggest that unnecessary preoperative testing does not improve the outcome of surgery and may delay care and increase costs and morbidity by leading to unnecessary workups for irrelevant problems. Is it downgrading to act on recommendations to re-engineer how patients come to my service and how to optimize the outcome? Is it wrong to consolidate services or do away with procedures and practices that have not been shown to benefit patients?
Mr. Vanderwater's statement of fact, “We are not in the health care business. We are in the sick care business,” is presented as disdainful. In the university and nonprofit teaching hospitals where I have had experience, there was very little emphasis on keeping patients well and tremendous reward for doing things to them when they were sick. And as I remember it, neither Medicare nor Medicaid reimburses for preventive services. It seems odd to condemn Columbia/HCA for not accomplishing what universities, nonprofit hospitals, politicians, and society as a whole have not achieved.
I must also comment on the implication that Columbia/HCA's hospitals contribute nothing to medical education. Columbia Michael Reese Hospital supports university-affiliate residencies in a wide variety of specialties. There are 209 residents and fellows and more than 50 full-time-equivalent faculty members. . . .
Marvin A. McMillen, M.D.
Columbia Michael Reese Hospital and Medical Center, Chicago, IL 60616-3390To the Editor:
During the debate over the Clinton health care reform and for the previous two decades, concern about health care in the United States revolved around the need to control inflation and expand access for uninsured groups. Repeatedly, we decried the failure of our “nonsystem” to provide efficient, high-quality, low-cost health care. Repeatedly, we decried our inability to expand Medicaid coverage or build health care safety nets because of high costs. The multitude of efforts by the government to control costs and expand coverage (excluding Medicare and Medicaid) failed.
Over the past several years, we have seen dramatic changes, none of which have been driven by government, academic medical centers, the press, or doctors and hospitals. Instead, the revolution has been and continues to be driven by employers and employees in response to corporate costs and individual payroll deductions.
Despite Kuttner's apparent desire for a return to nonaccountable health care and double-digit health care inflation, his cries are too late. Efforts such as ours here at Columbia/HCA are succeeding in creating efficient, high-quality systems of care for tomorrow's world.
Frank M. Houser, M.D.
Columbia/HCA Healthcare Physician Services, Nashville, TN 37202-4350Author/Editor Response
Mr. Kuttner replies:
To the Editor: Dr. Kaplan has not refuted anything in my article. MetroWest was indeed in financial distress, or it would not have sought a buyer. And other institutions in greater Boston indeed rejected Dr. Kaplan's overtures on terms that he could accept. Attorney General Harshbarger indeed intervened to supervise the terms of the sale. If MetroWest initiated the contact with the attorney general, it is only because Dr. Kaplan knows that Massachusetts law requires the attorney general's review of such deals.
With respect to Dr. McMillen's letter, I did not claim that Columbia/HCA and other for-profit hospitals never accept money-losing cases and never spend anything on education and research. I said only that they resist cross-subsidy and that their corporate strategy is to achieve a profitable case mix. Regarding Columbia Michael Reese Hospital, if Dr. McMillen talks to his own colleagues, he surely is aware that Columbia/HCA's operation of the hospital has been highly controversial among the medical staff.
Robert Kuttner
, Cambridge, MA 02138
