HCA, the largest for-profit hospital chain in the U.S., had a terribly unflattering profile in The New York Times on Monday.
In a detailed, investigative piece, the paper laid the charge that executives had conducted an inquiry that revealed that doctors in some of its hospitals in Florida were performing expensive cardiac procedures such as stenting on patients when there was no clinical need for it.
What is deeply troubling is that HCA had already settled once with the Department of Justice against charges of Medicare fraud back in 2000 that paid a total of $1.5 billion.
The article suggests that Bain Capital, (yes that same private equity firm that Mitt Romney owned and ran) took HCA private in 2006 but by mid-2010 was looking for payday. So HCA borrowed money to pay dividends to the firm and went public in 2011.
And as a natural result of borrowing and going public, it needed a way to generate profits. That pressure has been immense even as HCA executives have talked about serving its patients with high-quality care.
So the question is, should hospitals be for-profit, public companies?
The reasonable answer should be no.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Wall Street companies are judged by one criteria alone: financial performance. Yes, if you can serve a higher moral goal as you make money — in this case, taking care of sick people — more power to you. But that is a sideshow. The real focus is on dollars and cents. And for a public company, the pressure to perform is constant.
Being nonprofit does not necessarily mean that hospitals aren’t a business and the practice of medicine cannot make people and companies wealthy.
Witness Mayo Clinic. The nonprofit hospital group has built a solid reputation for unparalleled care even as it has made money.
In 2011, Mayo Clinic’s operating income jumped 18.4 percent to $610.2 million, compared with the same period a year ago.
Making money helps hospitals provide better services to patients, but concerns about profitability should not be the overriding factor guiding hospital operations.
Healthcare providers and healthcare delivery should not be held hostage to Wall Street demands.
