Just in time for the holidays, there’s a propaganda war raging in the state blogosphere about what hospital expenses really area and what this should mean for underserved rural people, Medicaid expansion and the Affordable Care Act.
The Virginia Hospital & Healthcare Association, an advocacy group, has been on an offensive of late with reports and press releases showing that rural Virginia hospitals are on financial thin ice thanks to cuts in federal disbursements, changes with Obamacare (a.k.a. the Affordable Care Act), changes with Medicare, the lack of Medicaid expansion and a host of other problems.
According to their latest advisory: “The numbers show that roughly 25 percent of Virginia’s acute care hospitals, and nearly 42 percent of rural hospitals, operated in the red during calendar year 2014.”
It adds: “It is commonly accepted in the industry that achieving a 4 percent operating
margin is the minimum threshold necessary for hospitals to maintain fiscal stability and provide for capital expenditures. Based on VHI (Virginia Health Information) 2014 data, 18 of 31 rural hospitals fell below that mark. Statewide, 40 of 89 hospitals were in that category, which includes some with negative margins and others with modestly positive margins.”
Sounds bad. But then go back a month or so and read this blast from the Thomas Jefferson Institute for Public Policy, a conservative think tank. Its bottom line is that Virginia’s hospitals increased annual profits 10.7% in 2014 compared to the year before.”
When the think tank issued its report, the advocacy group pounced back saying its data was flawed and that profit margins are a far better way to measure real profitability and not just increases in profits themselves.
The Tom Jeff types want you to believe that hospitals are just wallowing in dough so there’s no need for public support. Their agenda is to set the stage for legislative changes in the Certificate for Public Need (COPN), a state system that requires health facilities to show they are needed before getting state permits.
The institute is part of a group that wants to dump the COPN so that medical care can be expanded according to where profitable outlets can be set up. Of course, this doesn’t answer the needs of people living in sparsely-populated and remote areas. If you want to see how well “the Magic of the Market” works for them, check out how well they are served by broadband Internet providers.
My reading is that the Thomas Jefferson Institute is cherry-picking the results of big, for-profit hospitals like HCA, which operates Johnston-Willis and Chippenham in the Richmond area. They also have bought up a lot of doctors’ practices and supports them and itself with highly aggressive billing techniques.
Rural hospitals, like the HCA’s operations, are mandated to accept patients whether they have the wherewithal or not. They get stuck with the expenses of that car wreck patient brought in to the emergency room at 3 a.m. It’s not like they can farm him out to the nearest Urgicare. The next full service hospital could be a couple of hours away.
What’s also curious is that the hospital association is run by Sean Connaughton, a longtime Republican politician and executive who used to be head of the board of supervisors in Prince William County and was Robert McDonnell’s Secretary of Transportation and played a role in the U.S. 460 road to nowhere that cost taxpayers more than $300 million.
The Thomas Jefferson Institute serves the hard right, little government crowd that includes people like Bill Howell, speaker of the House of Delegates. It never misses a chance to bash what it sees as government waste regardless of the human cost. It is also known for making lots of factual errors and loopy analysis.
This all is going to shoot right into the upcoming General Assembly session where expanded Medicaid to 400,000 undeserved Virginians will come up yet again.
