Wednesday, January 12, 2005

What Does a not-for-Profit Hospital Owe its Community?

Tom Cragg, friend, erstwhile fellow parishioner of Christ Church Detroit, and staffer in the health benefits section of General Motors, was thoughtful enough to send me a copy of an ad recently run in the Dayton, Ohio newspapers and sponsored by DELPHI, the IUE-CWA, the AFL-CIO Regional Labor Council, and General Motors.

The ad referred to negotiations between the local Blue Cross Blue Shield plans and Premier Health Partners. According to its web page, Premier Health Partners is an entity consisting of two general hospitals - Good Samaritan and Miami Valley– plus a primary care physician group, a home health agency, a Living Care Center, and a cancer prevention institute. The two general hospitals between them represent about three-fourths of the private general hospital beds in Dayton.

Apparently, negotiations have not been going very well. According to the ad, Premier is demanding a 45% increase in rates over a three year period – an amount that the ad sponsors clearly believe to be excessive. The ad also mentioned Premier’s $900 million in reserves and profitability at current rates. It said “….the very visible negotiations with Anthem Blue Cross and Blue Shield and Premier Health Partners should in no way be viewed as a tug-of-war between Anthem and Premier. This is an issue between Premier and those of us who live and work in this community…”

In his covering note, Tom pointed out that the ad “raises the important question as to what a not-for-profit hospital owes to the community with regard to cost control and profit expectations.”

He goes on to ask: “In particular, given the near monopoly position that some health systems have today (like Premier in Dayton), is it easier for them to push for revenue increases (despite the fact that quality and customer service may be deteriorating) rather than taking on the harder day-by-day struggle to cut costs and eliminate waste? And, for community-based health systems, given the near absent community voice in not-for-profit hospital system management, what level of profit is acceptable before the community needs to speak up and step in?”

Inasmuch as this, according to Tom, is not his area of expertise or responsibility at GM, he leaves the question with me.

I pass it on, in turn, to readers. I’m sure Tom would be as interested as I to hear what they have to say.

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