Moody’s: Hospital financial outlook worse as COVID-19 relief funds start to dwindle

https://www.fiercehealthcare.com/hospitals/moody-s-hospital-financial-outlook-worse-as-covid-19-relief-funds-start-to-dwindle?mkt_tok=eyJpIjoiWTJZek56Z3lNV1E0TW1NMyIsInQiOiJKdUtkZE5DVGphdkNFanpjMHlSMzR4dEE4M29tZ24zek5lM3k3amtUYSt3VTBoMmtMUnpIblRuS2lYUWozZk11UE5cL25sQ1RzbFpzdExcL3JvalBod3Z6U3BZK3FBNjZ1Rk1LQ2pvT3A5Witkc0FmVkJocnVRM0dPbFJHZTlnRGJUIn0%3D&mrkid=959610

For-profit hospitals are expected to see a financial decline over the next 12 to 18 months as federal relief funds that shored up revenue losses due to COVID-19 start to wane, a recent analysis from Moody’s said.

The analysis, released Monday, finds that cost management is going to be challenging for hospital systems as more surgical procedures are expected to migrate away from the hospital and people lose higher-paying commercial plans and go to lower-paying government programs such as Medicaid.

“The number of surgical procedures done outside of the hospital setting will continue to increase, which will weaken hospital earnings, particularly for companies that lack sizeable outpatient service lines (including ambulatory surgery centers),” the analysis said.

A $175 billion provider relief fund passed by Congress as part of the CARES Act helped keep hospital systems afloat in March and April as volumes plummeted due to the cancellation of elective procedures and reticence among patients to go to the hospitals.

Some for-profit systems such as HCA and Tenet pointed to relief funding to help generate profits in the second quarter of the year. The benefits are likely to dwindle as Congress has stalled over talks on replenishing the fund.

“Hospitals will continue to recognize grant aid as earnings in Q3 2020, but this tailwind will significantly moderate after that,” Moody’s said.

Cost cutting challenges

Compounding problems for hospitals is how to handle major costs.

Some hospital systems cut some costs such as staff thanks to furloughs and other measures.

“Some hospitals have said that for every lost dollar of revenue, they were able to cut about 50 cents in costs,” the analysis said. “However, we believe that these levels of cost cuts are not sustainable.”

Hospitals can’t cut costs indefinitely, but the costs for handling the pandemic (more money for personal protective equipment and safety measures) are going to continue for some time, Moody’s added.

“As a result, hospitals will operate less efficiently in the wake of the pandemic, although their early experiences in treating COVID-19 patients will enable them to provide care more efficiently than in the early days of the pandemic,” the analysis found. “This will help hospitals free up bed capacity more rapidly and avoid the need for widespread shutdowns of elective surgeries.”

But will that capacity be put to use?

The number of surgical procedures done outside of the hospital is likely to increase and will further weaken earnings, Moody’s said.

“Outpatient procedures typically result in lower costs for both consumers and payers and will likely be preferred by more patients who are reluctant to check-in to a hospital due to COVID-19,” the analysis said.

The payer mix will also shift, and not in hospitals’ favor. Mounting job losses due to the pandemic will force more patients with commercial plans toward programs such as Medicaid.

“This will hinder hospitals’ earnings growth over the next 12-18 months,” Moody’s said. “Employer-provided health insurance pays significantly higher reimbursement rates than government-based programs.”

Bright spots

There are some bright spots for hospitals, including that not all of the $175 billion has been dispersed yet. The CARES Act continues to provide hospitals with a 20% add-on payment for treating Medicare patients that have COVID-19, and it suspends a 2% payment cut for Medicare payments that was installed as part of sequestration.

The Centers for Medicare & Medicaid Services also proposed increasing outpatient payment rates for the 2021 fiscal year by 2.6% and in-patient rates by 2.9%. The fiscal year is set to start next month.

Patient volumes could also return to normal in 2021. Moody’s expects that patient volumes will return to about 90% of pre-pandemic levels on average in the fourth quarter of the year.

“The remaining 10% is likely to come back more slowly in 2021, but faster if a vaccine becomes widely available,” the analysis found.

 

 

 

 

Outlook remains negative for US for-profit hospitals, Moody’s says

https://www.beckershospitalreview.com/finance/outlook-remains-negative-for-us-for-profit-hospitals-moody-s-says.html?utm_medium=email

Fitch gives negative ratings outlook for APAC life insurance | Insurance  Business

Moody’s Investors Service maintained its negative outlook for U.S. for-profit hospitals due to waning federal aid, shifting payer mixes and varying volume trends.

Moody’s expects for-profit hospitals earnings before interest tax depreciation and amortization to decline by a low-to-mid single-digit rate in the next 12 to 18 months.

The credit rating agency maintained the negative outlook for several reasons, including that government aid to providers is beginning to wind down and most providers will see adverse payer mix shifts in the next year due to the high unemployment rate in the U.S.

In addition, volume trends and acuity levels are likely to vary significantly for these for-profit providers across the U.S. and the number of procedures performed outside of the hospital setting will continue to increase, which will weaken hospital earnings, Moody’s said. 

Further, the credit rating agency said that many providers implemented rapid and aggressive cost cutting measures, which enabled them to exit the second quarter largely unscathed.

“Some hospitals have said that for every lost dollar of revenue, they were able to cut about 50 cents in costs. However, we believe that these levels of cost cuts are not sustainable,” Moody’s said.

Overall, Moody’s said it expects volumes to gradually return to pre-COVID-19 levels in 2021.

 

 

 

A Doctor Went to His Own Employer for a COVID-19 Antibody Test. It Cost $10,984.

https://www.propublica.org/article/a-doctor-went-to-his-own-employer-for-a-covid-19-antibody-test-it-cost-10-984

An Austin Doctor Went To His Own Employer For A COVID-19 Antibody Test. It Cost  $10,984. – Corridor News

Physicians Premier ER charged Dr. Zachary Sussman’s insurance $10,984 for his COVID-19 antibody test even though Sussman worked for the chain and knows the testing materials only cost about $8. Even more surprising: The insurer paid in full.

When Dr. Zachary Sussman went to Physicians Premier ER in Austin for a COVID-19 antibody test, he assumed he would get a freebie because he was a doctor for the chain. Instead, the free-standing emergency room charged his insurance company an astonishing $10,984 for the visit — and got paid every penny, with no pushback.

The bill left him so dismayed he quit his job. And now, after ProPublica’s questions, the parent company of his insurer said the case is being investigated and could lead to repayment or a referral to law enforcement.

The case is the latest to show how providers have sometimes charged exorbitant prices for visits for simple and inexpensive COVID-19 tests. ProPublica recently reported how a $175 COVID-19 test resulted in charges of $2,479 at a different free-standing ER in Texas. In that situation, the health plan said the payment for the visit would be reduced and the facility said the family would not receive a bill. In Sussman’s case, the insurer paid it all. But those dollars come from people who pay insurance premiums, and health experts say high prices are a major reason why Americans pay so much for health care.

Sussman, a 44-year-old pathologist, was working under contract as a part-time medical director at four of Physicians Premier’s other locations. He said he made $4,000 a month to oversee the antibody tests, which can detect signs of a previous COVID-19 infection. It was a temporary position holding him over between hospital gigs in Austin and New Mexico, where he now lives and works.

In May, before visiting his family in Scottsdale, Arizona, Sussman wanted the test because he had recently had a headache, which can be a symptom of COVID-19. He decided to go to one of his own company’s locations because he was curious to see how the process played out from a patient’s point of view. He knew the materials for each antibody test only amounted to about $8, and it gets read on the spot — similar to an at-home pregnancy test.

He could even do the reading himself. So he assumed Physicians Premier would comp him and administer it on the house. But the staff went ahead and took down his insurance details, while promising him he would not be responsible for any portion of the bill. He had a short-term plan through Golden Rule Insurance Company, which is owned by UnitedHealthcare, the largest insurer in the country. (The insurance was not provided through his work.)

During the brief visit, Sussman said he chatted with the emergency room doctor, whom he didn’t know. He said there was no physical examination. “Never laid a hand on me,” he said. His vitals were checked and his blood was drawn. He tested negative. He said the whole encounter took about 30 minutes.

About a month later, Golden Rule sent Sussman his explanation of benefits for the physician portion of the bill. The charges came to $2,100. Sussman was surprised by the expense but he said he was familiar with the Physicians Premier high-dollar business model, in which the convenience of a free-standing ER with no wait comes at a cost.

“It may as well say Gucci on the outside,” he said of the facility. Physicians Premier says on its website that it bills private insurance plans, but that it is out-of-network with them, meaning it does not have agreed-upon prices. That often leads to higher charges, which then get negotiated down by the insurers, or result in medical bills getting passed on to patients.

Sussman felt more puzzled to see the insurance document say, “Payable at: 100%.” So apparently Golden Rule hadn’t fought for a better deal and had paid more than two grand for a quick, walk-in visit for a test. He was happy not to get hit with a bill, but it also didn’t feel right.

He said he let the issue slide until a few weeks later when a second explanation of benefits arrived from Golden Rule, for the Physicians Premier facility charges. This time, an entity listed as USA Emergency sought $8,884.16. Again, the insurer said, “Payable at: 100%.”

USA Emergency Centers says on its website that it licenses the Physicians Premier ER name for some of its locations.

Now Sussman said he felt spooked. He knew Physicians Premier provided top-notch care and testing on the medical side of things. But somehow his employer had charged his health plan $10,984.16 for a quick visit for a COVID-19 test. And even more troubling to Sussman: Golden Rule paid the whole thing.

Sussman was so shaken he resigned. “I have decided I can no longer ethically provide Medical directorship services to the company,” he wrote in his July 13 resignation email. “If not outright fraudulent, these charges are at least exorbitant and seek to take advantage of payers in the midst of the COVID19 pandemic.”

Sussman agreed to waive his patient privacy so officials from the company could speak to ProPublica. USA Emergency Centers declined interview requests and provided a statement, saying “the allegations are false,” though it did not say which ones.

The statement also said the company “takes all complaints seriously and will continue to work directly with patients to resolve issues pertaining to their emergency room care or bill. …The allegations received pertain to a former contracted employee, and we cannot provide details or further comment at this time.”

Physicians Premier advertises itself as a COVID-19 testing facility on its website, with “results in an hour.” According to the claims submitted by Physicians Premier to Golden Rule, obtained by Sussman, the physician fee and facility fees were coded as emergency room visits of moderate complexity. That would mean his visit included an expanded, problem-focused history and examination. But Sussman said the staff only took down a cursory medical history that took a few minutes related to his possible exposure to COVID-19. And he said no one examined him.

The claims also included codes for a nasal swab coronavirus test. But that test was not performed, Sussman said. The physician’s orders documented in the facility’s medical record also do not mention the nasal swab test. Those charges came to $4,989.

The claims show two charges totaling $1,600 for the antibody test Sussman received. In a spreadsheet available on its website on Friday, Physicians Premier lists a price of $75 for the antibody test.

For comparison, Medicare lists its payment at $42.13 for COVID-19 antibody tests. That’s because Medicare, the government’s insurance plan for the disabled and people over 65, sets prices.

Complicating matters, Texas is the nation’s epicenter for free-standing emergency rooms that are not connected to hospitals. Vivian Ho, an economist at Rice University who studies the facilities, said their business model is based on “trying to mislead the consumer.” They set up in locations where a high proportion of people have health insurance, but they don’t have contracted rates with the insurers, Ho said. They are designed to look like lower-priced urgent care centers or walk-in clinics, Ho said, but charge much higher emergency room rates. (The centers have defended their practices, saying that they clearly identify as emergency rooms and are equipped to handle serious emergencies, and that patients value the convenience.)

The day after he resigned, Sussman texted an acquaintance who works as a doctor at Physicians Premier. The acquaintance said the facility typically only collects a small percentage of what gets billed. “I just don’t want to be part of the game,” Sussman texted to him.

Shelley Safian, a Florida health care coding expert who has written four books on medical coding, reviewed Sussman’s medical records and claims at ProPublica’s request. The records do not document a case of a complex patient that would justify the bills used to code the patient visit, she said. For example, the chief complaint is listed as: “A generic problem (COVID TESTING).” Under “final acuity,” the medical record says, “less urgent.” Under the medical history it says, “NO SYMPTOMS.”

Safian described the charges as “obscene” and said she was shocked the insurer paid them in full. “This is the exact opposite of an employee discount,” she said. “Obviously nobody is minding the store.”

Congress opened the door to profiteering during the pandemic when it passed the CARES Act. The legislation, signed into law in March, says health insurers must pay for out-of-network testing at the cash price a facility posts on its website, or less. But there may be other charges associated with the tests, and insurers generally have tried to avoid making patients pay any portion of costs related to COVID-19 testing or treatment.

The charges for Sussman’s COVID-19 test visit are “ridiculous,” said Niall Brennan, president and CEO of the Health Care Cost Institute, a nonprofit organization that studies health care prices. Brennan wondered whether the CARES Act has made insurers feel legally obligated to cover COVID-19 costs. He called it “well intentioned” public policy that allows for “unscrupulous behavior” by some providers. “Insurance companies and patients are reliant on the good will and honesty of providers,” Brennan said. “But this whole pandemic, combined with the CARES Act provision, seems designed for unscrupulous medical providers to exploit.”

It’s illegal for medical providers to charge for services they did not provide. But ProPublica has previously reported how little insurers, including UnitedHealthcare, do to prevent fraud in their commercial health plans, even though experts estimate it consumes about 10% of all health care costs. For-profit insurance companies don’t want to spend the time and money it takes to hold fraudulent medical providers accountable, former fraud investigators have told ProPublica. Also, the insurance companies want to keep providers in their networks, so they easily cave.

In mid-July, Sussman used the messenger system on Golden Rule’s website to report his concerns about the case. Short-term health plans are typically less expensive because they offer less comprehensive coverage. Sussman said he appreciated that his plan covered the charges, and felt compelled to tell the company what had happened.

That led to a phone conversation with a fraud investigator. They went line by line through the charges and Sussman told him many of the services had not been provided. “His attitude was kind of passive,” Sussman said of the fraud investigator. “There was no indignation. He took in stride, like, ‘Yep, that’s what happens.’” The investigator said he would escalate the case and see if the facility had submitted any other suspect claims. But Sussman never heard back.

Maria Gordon-Shydlo, a spokeswoman for UnitedHealthcare, which owns Golden Rule, would not provide anyone to be interviewed. She said in an emailed statement that the company’s first priority during the pandemic “has been to ensure our members get the care they need and are not billed for COVID testing and treatment. Unfortunately, there are some providers who are trying to take advantage of this and are inappropriately or even fraudulently billing.”

“Golden Rule has put processes in place to address excessive COVID-related billing,” the statement said. “We are currently investigating this matter and, if appropriate, will seek to recoup any overpayment and potentially refer this case to law enforcement.”

Golden Rule’s 100% payment of the charges may simply come down to “incompetence,” said Dr. Eric Bricker, a Texas internist who spent years running a company that advised employers who self-fund their insurance. Insurance companies auto-adjudicate millions of claims on software that may be decades old, said Bricker, who produces videos to help consumers and employers understand health care. If bills are under a certain threshold, like $15,000, they may sail through and get paid without a second look, he said.

UnitedHealth Group reported net earnings of $6.6 billion in the second quarter of 2020. Bricker said the company may be paying bills without questioning them because it doesn’t “want to create any noise” by saying no at a time its own earnings are so high, Bricker said.

Texas has a consumer protection law that’s designed to prevent businesses from exploiting the public during a disaster. The attorney general’s office has received and processed 52 complaints about health care businesses and billing or price gouging related to the pandemic, a spokeswoman from the office said in an email. The agency does not comment on the existence of any investigations, but has not filed any cases related to overpriced COVID-19 tests.

Sussman said he got one voicemail from a billing person at Physicians Premier, saying she wanted to explain the charges, but he did not call back. He said he spoke out about it to ProPublica because he opposes Medicare-for-all health care reform proposals. Bad actors in the profession could cause doctors to lose their privilege to bill and be reimbursed independently, he said. Most physicians are fair with their billing, or even conservative, he said. “If instances like these go unchecked it will provide more ammo for advocates of a single-payer system.”

 

 

 

For-profit systems fare better than nonprofits in weathering COVID-19 cash crisis, MedPAC says

https://www.fiercehealthcare.com/hospitals/medpac-for-profit-systems-do-better-job-than-nonprofits-weathering-covid-19-cash-crisis?mkt_tok=eyJpIjoiTlRJM05qVmhOVEptWm1ZNSIsInQiOiJaRHlaWHpyaHVZUHlvTFwvZmRaZDZKUVY2aEJka25ncStYSmcxZXo3bTR5TzV3NFE0YzdpYlpGMGRrbUxkcWVYT0Z4ZTVMa0VPN3BuSElkMldQRXBpTk1pbnN1T3VoalNXd0JzTU9aYngwazltVXRud0hISVppZnF2OHU0bFwvVzN6In0%3D&mrkid=959610

For-profit health systems have been better able to weather a financial crisis caused by COVID-19 than their nonprofit counterparts because they could reduce more expenses, a new analysis from the Medicare Payment Advisory Commission finds.

The analysis released Thursday during MedPAC’s monthly meeting comes as providers struggle to recover from low patient volumes stemming from the COVID-19 pandemic. The report also explored how physician offices have fared.

Hospitals faced a massive dip in patient volume in March and April at the onset of the pandemic, which forced facilities to cancel or delay elective procedures. Patient volumes have since recovered to near pre-pandemic levels, MedPAC found.

But the recovery has been mixed depending on the hospital system.

MedPAC looked at earnings for three large nonprofit systems in the U.S. and four large for-profit systems in the second quarter and found a variation in how they handled the decline in revenue.

Aggregate patient revenue for the nonprofit systems declined by $1.5 billion and this led to a $621 million loss for the systems in the second quarter compared to the same period in 2019. Overall the systems had operating profit margins ranging from negative 13% to positive 5%.

The four for-profit systems saw a $3.5 billion decline in patient revenue. However, the systems posted an increase of $634 million in operating income.

This led to a range of operating margin increases of 1 to 14% in the second quarter compared to 2019.

The for-profit systems got more relief funding ($1.9 billion compared with $782 million) from a $175 billion federal provider relief fund created by the CARES Act.

But the biggest difference between for-profit and nonprofit systems was how they handled expenses.

“For-profit systems substantially reduced expenses in the second quarter, in aggregate reduced by $2.3 billion and that made up for lost revenue,” said Jeff Stensland, a MedPAC staff member, during the meeting.

Nonprofit systems only saw a $13 million decline in expenses.

The analysis comes as some larger for-profit systems like HCA Healthcare generate profits in the second quarter, while nonprofit systems such as Providence posted losses.

MedPAC did not name the systems that it analyzed nor did it delve into what expenses were reduced and how.

Some systems have taken to furloughing employees but all systems have faced increased expenses for personal protective equipment and some staff.

The analysis also looked at the financial impact of the pandemic on physician offices. MedPAC found that federal grants, loans and payment increases offset a majority of the revenue lost in March and May due to patient volume declines.

MedPAC estimated physician offices lost between $45 to $55 billion. However, offices got $26 billion in loans from the Paycheck Protection Program, which don’t have to be repaid if the majority of the funds go to payroll.

Physician offices also received $5 billion out of the $175 billion provider relief fund passed as part of the CARES Act.

Physicians also got $1 billion in savings from the temporary suspension of a 2% decline in Medicare payments created under sequestration.

 

 

 

California AG conditionally approves $350M sale of nonprofit to Prime Healthcare

https://www.healthcarefinancenews.com/news/california-ag-conditionally-approves-350m-sale-st-francis-medical-center-prime-healthcare

Prime Healthcare, CEO Prem Reddy settle false-claims suit for $65M

Prime will acquire St. Francis for a net of $350 million, with a $200 million base cash price and $60 million for accounts receivable.

California Attorney General Xavier Becerra has conditionally approved Verity Health’s application to transfer ownership of St. Francis Medical Center to Prime Healthcare. The Attorney General’s decision follows an earlier decision by the U.S. Bankruptcy Court of the Central District of California granting Verity’s request to reject the existing collective bargaining agreements which impose legacy cost structures that it said contributed to bankruptcy.

Becerra noted that his approval of the sale of St. Francis to Prime Healthcare “protect(s) access to care for the Los Angeles communities served” by St. Francis.

“The COVID-19 public health crisis has brought home the importance of having access to lifesaving hospital care nearby in our communities,” he said. “St. Francis Medical Center is not just an asset, it is an indispensable neighbor, it is the workers who serve the patients, and the doctors who save lives. We conditionally approve this sale to keep it that way.”

Prime Healthcare has built a reputation for saving financially distressed hospitals across the U.S., touting improved clinical quality. Healthgrades said Prime had hospitals named among the nation’s 100 best 53 times, and has been the recipient of several Patient Safety Excellence Awards.

The Attorney General’s office conducted an exhaustive review of the transaction for the past several months and carefully considered public input on the proposed transaction. The Attorney General’s approval includes conditions for the sale which Prime is currently reviewing. Pending a final ruling by the Bankruptcy Court, the transaction is expected to be completed this summer.

THE LARGER TREND

In early April, the U.S. Bankruptcy Court approved the Asset Purchase Agreement for the sale of St. Francis Medical Center to Prime. Under the agreement, Prime will acquire St. Francis for a net consideration of over $350 million, including a $200 million base cash price and $60 million for accounts receivable. In addition, Prime has committed to invest $47 million in capital improvements and extend offers of employment to nearly all staff.

The court also recently granted Verity’s request to reject the existing collective bargaining agreements with two unions that represent associates at St. Francis Medical Center, SEIU and UNAC. The court noted that Prime Healthcare was the only party to submit a qualifying bid for St. Francis and that without rejecting the existing CBAs, “St. Francis would not continue to operate as a going concern, and all of the UNAC (and SEIU) represented employees would lose their jobs.”

The court also noted that Prime and Verity had made multiple efforts to negotiate in good faith with the unions, and the parties devoted “hundreds of hours to negotiations,” but ultimately were unable to agree on new CBAs. Further, the court determined that one of the reasons for the hospital’s bankruptcy was the “legacy cost structure imposed by the existing CBAs.”

It then staid that the proposals were rejected “without good cause” by the unions. Prime said it negotiated in good faith and proposed increasingly generous offers to UNAC and SEIU with wages far above its existing agreements at its Los Angeles-area hospitals. Prime’s latest offer to SEIU maintained existing wages for roughly 90% of SEIU members, and increased wages for some of them. Prime said these wages would be substantially higher than those recently voted by SEIU members at three of Prime’s Los Angeles hospitals.

ON THE RECORD

“Receiving conditional approval is an important step in ensuring Prime is able to preserve the St. Francis mission for the benefit of associates, members of the medical staff and most importantly the patients and Southeast Los Angeles community that has relied on St. Francis for 75 years,” said Rich Adcock, CEO of Verity Health.

“We are honored to be selected to continue the St. Francis legacy and are working to review the conditions and finalize the sale as quickly as possible,” said Dr. Sunny Bhatia, CEO, Region I and chief medical officer of Prime Healthcare. “St. Francis’ mission is especially critical during this pandemic and we honor the service of all caregivers. Prime has already started investments at St. Francis that will enhance patient care as we commit to continue every service line, community benefit program, charity care and expand new services to the community.”

 

 

 

Quorum Health to emerge from bankruptcy next month

https://www.healthcaredive.com/news/quorum-bankruptcy-approval-emerging-in-july/580805/

Dive Brief:

  • For-profit hospital operator Quorum Health received approval of its plan to recapitalize the business Monday in U.S. Bankruptcy Court for the District of Delaware. Quorum expects to emerge from bankruptcy in early July, according to regulatory filings.
  • The system filed for Chapter 11 bankruptcy April 7 to address current liquidity needs while continuing to care for patients and keep its hospitals operating amid a pandemic, according to a statement. It entered into a restructuring agreement with a majority of its lenders and noteholders.
  • Quorum still needs the court to issue a final order, but said the reorganization will reduce its debt by about $500 million, as originally expected.

Dive Insight:

Tennessee-based Quorum Health, which operates 22 rural and mid-sized hospitals in 13 states, may have been more ill-positioned financially than other systems going into the pandemic.

The company went public in May 2016 with 38 hospitals — 14 of which have since shuttered. In 2017, private equity firm KKR took a 5.6% stake in the system for $11.3 million.

Beyond being Quorum’s largest debt-holder today, KKR also owns about 9% of its public shares. In December, the firm offered to buy Quorum out and take the hospital chain private at $1 a share.

But that didn’t pan out, and Quorum instead ended up filing for bankruptcy in April, soon after the COVID-19 pandemic hit. The restructuring agreement now “allows our company to begin a new chapter with the flexibility and resources to continue supporting our community hospitals as they serve on the frontlines of this pandemic and beyond,” Marty Smith, Quorum’s executive vice president and chief operating officer, said in a statement Monday.

“We are grateful for the confidence of our financial stakeholders and partners, as well as our dedicated employees and physicians, and look forward to building on the significant progress we have made in strengthening our operations in recent years,” he said.

 

 

 

 

HCA nurses issue 10-day strike notice at California hospital

https://www.healthcaredive.com/news/hca-nurses-issue-10-day-strike-notice-at-california-hospital/580359/

UPDATE: June 23, 2020: Riverside Community Hospital on Tuesday told Healthcare Dive the motivation behind the union’s strike notice “has very little to do with the best interest of their members and everything to do with contract negotiations.” The system said it has plans to ensure appropriate staffing and continued services for any type of event, including a strike.

Dive Brief:

  • Nurses at HCA Healthcare’s Riverside Community Hospital in south-central California issued a 10-day strike notice last week, citing a breakdown in discussions over safety and staffing, the union representing them said Monday.
  • The nurses plan to strike from Friday, June 26 through July 6, prior to starting contract negotiations with HCA on July 7.  The union plans to push for better staffing and safety measures, particularly hospital preparedness during states of emergency.
  • Neither HCA nor Riverside were available for comment, but the hospital told Becker’s Hospital Review it had hoped the union “would not resort to these tactics” during the COVID-19 pandemic and said it had not laid off or furloughed any employees due to the crisis.

Dive Insight:

The strike notice follows a recent job posting from the nation’s biggest for-profit chain seeking qualified nurses in the Los Angeles area in the event of a job action or work stoppage.

Nurses at Riverside Community Hospital pushed for an improved staffing agreement last year and got it — but the hospital recently ended that agreement, resulting in fewer RNs taking care of more patients amid a pandemic, according to the union.

Insufficient personal protective equipment, inadequate safety measures and recycling of single-use PPE is also putting nurses at increased risk of COVID-19 infection, the union alleges.

Scores of RNs at the hospital have fallen ill with COVID-19, according to a release, including deaths of an environmental services worker and a lab technician, that “have not caused RCH to improve staffing or increase PPE.”

PPE shortages have been a problem at all of the 27 hospitals SEIU Local 121 RN represents, the union says. But a member survey found HCA hospitals were particularly unprepared for shortages. Only 27% of local 121 RN members at HCA hospitals reported having access to N95 respirators in their unit, significantly lower than other hospitals surveyed, according to the union.

Nashville-based HCA has received the most among for-profits in Coronavirus Aid, Relief, and Economic Security Act funding so far, about $1 billion. The amount is about 2% of HCA’s total 2019 revenue.

The 184-hospital system said it has not had to furlough employees like other systems have, though some employees have been redeployed or seen their hours and pay decrease. HCA implemented a program providing seven weeks paid time off at 70% of base pay that was scheduled to expire May 16, but has been extended through this week.

A spokesperson with the country’s largest nurses union, National Nurses United, told Healthcare Dive the program isn’t technically a furlough because some HCA nurses participating said they must remain on call or work rotating shifts.

NNU has also recently fought with HCA over other pandemic-related labor issues. Nurses at 15 HCA hospitals protested in late May over contractually bargained wage increases the hospital says it can’t deliver due to financial strains, asking nurses to give up the increases or face layoffs.

Another dispute involves a last-minute change mandating in-person voting for nurses deciding whether to form a union at HCA’s Mission Hospital in Asheville, North Carolina, according to an NNU release.

SEIU Local 121 RN said HCA can “easily weather this storm financially, continue to provide profits for their shareholders, while at the same time support and protect nurses as they fight this disease and fight to save their community.”

 

 

 

 

HCA seeks nurse backup ahead of potential strike

https://www.healthcaredive.com/news/hca-seeks-nurse-backup-ahead-of-potential-strike/579502/

Dive Brief:

  • HCA is looking for qualified nurses in the event of a job action against its facilities in Los Angeles, such as a strike, according to a job posting from May 29. The giant hospital chain did not respond to multiple requests for comment.
  • The country’s largest nurses union, National Nurses United, has recently disputed with the system over other pandemic-related labor issues. Nurses at 15 HCA hospitals protested in late May over contractually bargained wage increases the hospital says it can’t deliver due to financial strains, asking nurses to give up the increases or face layoffs.
  • Another dispute involves a last-minute change mandating in-person voting for nurses deciding whether to form a union at HCA’s Mission Hospital in Asheville, North Carolina, according to an NNU release.

Dive Insight:

Nashville-based HCA Healthcare, the largest among for-profit hospital operators, has received the most among for-profits in Coronavirus Aid, Relief and Economic Security Act funding so far, about $1 billion. The amount is about 2% of HCA’s total 2019 revenue.

The 184-hospital system said it has not had to furlough any employees like other systems have, though some employees have been redeployed or seen their hours and pay decrease. HCA implemented a program providing seven weeks paid time off at 70% of base pay that was scheduled to expire May 16, but extended through June 27.

An NNU spokesperson told Healthcare Dive the program isn’t technically a furlough because some HCA nurses participating said they must remain on call or work rotating shifts.

The union spokesperson also confirmed that an email was sent to HCA nurses referring them to the strike-nurse job posting, which would offer more pay than their current roles.

“This really is a threat to nurses, and particularly insulting when you already have layoffs or cuts, if you don’t accept further concessions,” a union spokesperson told Healthcare Dive.

Nurses in California joined those in five other states at the end of May to protest HCA’s proposal to cut wage increases or impose layoffs.

At HCA’s Regional Medical Center in San Jose, California, NNU filed a suit to block the closure of the maternal-child care center, which it said is in violation of laws to protect the health and safety of the community. The closure proceeded anyway on May 30, followed by an announcement from Santa Clara County that the move may be jeopardizing the facility’s Level II Trauma designation agreement.

Across the country, frontline caregivers continue noting a lack of adequate personal protective equipment. The union’s executive director, Bonnie Castillo, will testify before Congress on Wednesday on protecting nurses during the pandemic and the dire need for optimal PPE.

 

 

 

Hospitals Got Bailouts and Furloughed Thousands While Paying C.E.O.s Millions

Hospitals Got Bailouts and Furloughed Thousands While Paying ...

Dozens of top recipients of government aid have laid off, furloughed or cut the pay of tens of thousands of employees.

HCA Healthcare is one of the world’s wealthiest hospital chains. It earned more than $7 billion in profits over the past two years. It is worth $36 billion. It paid its chief executive $26 million in 2019.

But as the coronavirus swept the country, employees at HCA repeatedly complained that the company was not providing adequate protective gear to nurses, medical technicians and cleaning staff. Last month, HCA executives warned that they would lay off thousands of nurses if they didn’t agree to wage freezes and other concessions.

A few weeks earlier, HCA had received about $1 billion in bailout funds from the federal government, part of an effort to stabilize hospitals during the pandemic.

HCA is among a long list of deep-pocketed health care companies that have received billions of dollars in taxpayer funds but are laying off or cutting the pay of tens of thousands of doctors, nurses and lower-paid workers. Many have continued to pay their top executives millions, although some executives have taken modest pay cuts.

The New York Times analyzed tax and securities filings by 60 of the country’s largest hospital chains, which have received a total of more than $15 billion in emergency funds through the economic stimulus package in the federal CARES Act.

The hospitals — including publicly traded juggernauts like HCA and Tenet Healthcare, elite nonprofits like the Mayo Clinic, and regional chains with thousands of beds and billions in cash — are collectively sitting on tens of billions of dollars of cash reserves that are supposed to help them weather an unanticipated storm. And together, they awarded the five highest-paid officials at each chain about $874 million in the most recent year for which they have disclosed their finances.

At least 36 of those hospital chains have laid off, furloughed or reduced the pay of employees as they try to save money during the pandemic.

Industry officials argue that furloughs and pay reductions allow hospitals to keep providing essential services at a time when the pandemic has gutted their revenue.

But more than a dozen workers at the wealthy hospitals said in interviews that their employers had put the heaviest financial burdens on front-line staff, including low-paid cafeteria workers, janitors and nursing assistants. They said pay cuts and furloughs made it even harder for members of the medical staff to do their jobs, forcing them to treat more patients in less time.

Even before the coronavirus swept America, forcing hospitals to stop providing lucrative nonessential surgery and other services, many smaller hospitals were on the financial brink. In March, lawmakers sought to address that with a vast federal economic stimulus package that included $175 billion for the Department of Health and Human Services to hand out in grants to hospitals.

But the formulas to determine how much money hospitals receive were based largely on their revenue, not their financial needs. As a result, hospitals serving wealthier patients have received far more funding than those that treat low-income patients, according to a study by the Kaiser Family Foundation.

One of the bailout’s goals was to avoid job losses in health care, said Zack Cooper, an associate professor of health policy and economics at Yale University who is a critic of the formulas used to determine the payouts. “However, when you see hospitals laying off or furloughing staff, it’s pretty good evidence the way they designed the policy is not optimal,” he added.

The Mayo Clinic, with more than eight months of cash in reserve, received about $170 million in bailout funds, according to data compiled by Good Jobs First, which researches government subsidies of companies. The Mayo Clinic is furloughing or reducing the working hours of about 23,000 employees, according to a spokeswoman, who was among those who went on furlough. A second spokeswoman said that Mayo Clinic executives have had their pay cut.

Seven chains that together received more than $1.5 billion in bailout funds — Trinity Health, Beaumont Health and the Henry Ford Health System in Michigan; SSM Health and Mercy in St. Louis; Fairview Health in Minneapolis; and Prisma Health in South Carolina — have furloughed or laid off more than 30,000 workers, according to company officials and local news reports.

The bailout money, which hospitals received from the Health and Human Services Department without having to apply for it, came with few strings attached.

Katherine McKeogh, a department spokeswoman, said it “encourages providers to use these funds to maintain delivery capacity by paying and protecting doctors, nurses and other health care workers.” The legislation restricts hospitals’ ability to use the bailout funds to pay top executives, although it doesn’t stop recipients from continuing to award large bonuses.

The hospitals generally declined to comment on how much they are paying their top executives this year, although they have reported previous years’ compensation in public filings. But some hospitals furloughing front-line staff or cutting their salaries have trumpeted their top executives’ decisions to take voluntary pay cuts or to contribute portions of their salary to help their employees.

The for-profit hospital giant Tenet Healthcare, which has received $345 million in taxpayer assistance since April, has furloughed roughly 11,000 workers, citing the financial pressures from the pandemic. The company’s chief executive, Ron Rittenmeyer, told analysts in May that he would donate half of his salary for six months to a fund set up to assist those furloughed workers.

But Mr. Rittenmeyer’s salary last year was a small fraction of his $24 million pay package, which consists largely of stock options and bonuses, securities filings show. In total, he will wind up donating roughly $375,000 to the fund — equivalent to about 1.5 percent of his total pay last year.

A Tenet spokeswoman declined to comment on the precise figures.

The chief executive at HCA, Samuel Hazen, has donated two months of his salary to a fund to help HCA’s workers. Based on his pay last year, that donation would amount to about $237,000 — or less than 1 percent — of his $26 million compensation.

“The leadership cadre of these organizations are going to need to make sacrifices that are commensurate with the sacrifices of their work force, not token sacrifices,” said Jeff Goldsmith, the president of Health Futures, an industry consulting firm.

Many large nonprofit hospital chains also pay their senior executives well into the millions of dollars a year.

Dr. Rod Hochman, the chief executive of the Providence Health System, for instance, was paid more than $10 million in 2018, the most recent year for which records are available. Providence received at least $509 million in federal bailout funds.

A spokeswoman, Melissa Tizon, said Dr. Hochman would take a voluntary pay cut of 50 percent for the rest of 2020. But that applies only to his base salary, which in 2018 was less than 20 percent of his total compensation.

Some of Providence’s physicians and nurses have been told to prepare for pay cuts of at least 10 percent beginning in July. That includes employees treating coronavirus patients.

Stanford University’s health system collected more than $100 million in federal bailout grants, adding to its pile of $2.4 billion of cash that it can use for any purpose.

Stanford is temporarily cutting the hours of nursing staff, nursing assistants, janitorial workers and others at its two hospitals. Julie Greicius, a spokeswoman for Stanford, said the reduction in hours was intended “to keep everyone employed and our staff at full wages with benefits intact.”

Ms. Greicius said David Entwistle, the chief executive of Stanford’s health system, had the choice of reducing his pay by 20 percent or taking time off, and chose to reduce his working hours but “is maintaining his earning level by using paid time off.” In 2018, the latest year for which Stanford has disclosed his compensation, Mr. Entwistle earned about $2.8 million. Ms. Greicius said the majority of employees made the same choice as Mr. Entwistle.

HCA’s $1 billion in federal grants appears to make it the largest beneficiary of health care bailout funds. But its medical workers have a long list of complaints about what they see as penny-pinching practices.

Since the pandemic began, medical workers at 19 HCA hospitals have filed complaints with the Occupational Safety and Health Administration about the lack of respirator masks and being forced to reuse medical gowns, according to copies of the complaints reviewed by The Times.

Ed Fishbough, an HCA spokesman, said that despite a global shortage of masks and other protective gear, the company had “provided appropriate P.P.E., including a universal masking policy implemented in March requiring all staff in all areas to wear masks, including N95s, in line with C.D.C. guidance.”

Celia Yap-Banago, a nurse at an HCA hospital in Kansas City, Mo., died from the virus in April, a month after her colleagues complained to OSHA that she had to treat a patient without wearing protective gear. The next month, Rosa Luna, who cleaned patient rooms at HCA’s hospital in Riverside, Calif., also died of the virus; her colleagues had warned executives in emails that workers, especially those cleaning hospital rooms, weren’t provided proper masks.

Around the time of Ms. Luna’s death, HCA executives delivered a warning to officials at the Service Employees International Union and National Nurses United, which represent many HCA employees. The company would lay off up to 10 percent of their members, unless the unionized workers amended their contracts to incorporate wage freezes and the elimination of company contributions to workers’ retirement plans, among other concessions.

Nurses responded by staging protests in front of more than a dozen HCA hospitals.

“We don’t work in a jelly bean factory, where it’s OK if we make a blue jelly bean instead of a red one,” said Kathy Montanino, a nurse treating Covid-19 patients at HCA’s Riverside hospital. “We are dealing with people’s lives, and this company puts their profits over patients and their staff.”

Mr. Fishbough, the spokesman, said HCA “has not laid off or furloughed a single caregiver due to the pandemic.” He said the company had been paying medical workers 70 percent of their base pay, even if they were not working. Mr. Fishbough said that executives had taken pay cuts, but that the unions had refused to take similar steps.

“While we hope to continue to avoid layoffs, the unions’ decisions have made that more difficult for our facilities that are unionized,” he said. The dispute continues.

Apparently anticipating a strike, a unit of HCA recently created “a new line of business focused on staffing strike-related labor shortages,” according to an email that an HCA recruiter sent to nurses.

The email, reviewed by The Times, said nurses who joined the venture would earn more than they did in their current jobs: up to $980 per shift, plus a $150 “Show Up” bonus and a continental breakfast.

 

 

 

 

HCA asks union to abandon wage increases this year

https://www.beckershospitalreview.com/hr/hca-asks-union-to-abandon-wage-increases-this-year.html?utm_medium=email

HCA revenue beats the hospital chain's expectations in 2019

A union representing more than 150,000 registered nurses in hundreds of U.S. hospitals is disputing with Nashville, Tenn.-based HCA Healthcare regarding pay and benefits.

National Nurses United said HCA is demanding that the union choose between an undetermined number of layoffs and no 401(k) match for this year or no layoffs and no nurse pay increases for the rest of the year, according to ABC affiliate Kiii TV.

HCA Healthcare, which to date has avoided layoffs due to the pandemic, told Becker’s Hospital Review it is asking the union to give up their demand for wage increases this year, just as nonunion employees have. HCA executive leadership, corporate and division colleagues and hospital executives have also taken pay cuts.  

The union said it takes issue with having to make this choice given HCA’s profits in the last decade, the additional funding the for-profit hospital operator received from the federal government’s Coronavirus Aid, Relief and Economic Security Act, and additional Medicare loans.

“It is outrageous for HCA to use the cover of the pandemic to swell its massive profits at the expense of its dedicated caregivers and the patients who will also be harmed by cuts in nursing staff,” Malinda Markowitz, RN, California Nurses Association/National Nurses United president, said in a news release.

HCA pointed to the pandemic pay program it implemented and recently extended through at least the end of June that allows employees who are called off or affected by a facility closure and cannot be redeployed to receive 70 percent of their base pay.

“It is surprising and frankly disappointing that unions would demand pay raises for their members and may reject the continuation of a generous pay program that is providing continued paychecks for more the 100,000 colleagues,” HCA said in a statement. “The goal of HCA Healthcare’s pandemic pay program is to keep our caregivers employed and receiving paychecks at a time when hospitals throughout the country are experiencing significant declines in patient volume and there is not enough work for them.”

HCA said more than 16,000 union members have participated in the pandemic pay program, even though it is not part of their contract.