How is HCA a For Profit Hospital Chain, Making All That Money–Billing in the ER a Contributing Factor for Reimbursements
Posted Aug 15 2012 1:26pm
Something that anyone in healthcare has known for a long time is reimbursements depend on the coding of care and this article in the Times takes a look at how HCA is operating and makes note of the fact that there are no standards set up by Medicare. We all know too that marketing among hospitals in the last couple of years has accelerated tremendously and as a reminder, Florida Governor Rick Scott also came from HCA where one of the biggest investigations as far as fraud was conducted a few years ago. Recently HCA has also come under fire for the number of stenting procedures that have taken place in Florida and in some other facilities across the US. Bain Capital, big investor with Mitt Romney has profited very well too.
Also worth noting is that HCA in March of 2011 pulled off the largest private equity firm offering in IPO history of $3.8 billion at that time. The private equity owners of HCA paid themselves a $2 Billion dollar dividend before the IPO. California nurses went on strike shortly after and the strike was even supported by Governor Jerry Brown as it was all about the quality of care for patients.
Just what affect is all this having on patient care is a big question as with their policies in place, many who would have normally been seen in the ER room were turned away if they had conditions like the flu, cold, etc. that were not considered urgent. There have been whistle blowers too, doctors and the pressure is on their positions for sure as they are the patient gateways for care.
So what is the secret here…must be those billing algorithms that code and work through the system. I would maybe venture to say that both Medicare and health insurance companies might have HCA under the microscope after this article in the Times. Inquiring minds today want to know.
We keep hearing stories as such and again when it comes to the billing, has private industry once again found the right match of algorithms to produce higher payments from Medicare and from insurance companies for that matter? I keep telling all it’s the “algorithms that move money” and banks, insurance companies, etc. who perfect them for “desired” results with some very intelligent programmers today are exactly the ones cashing on in big profits. This type of analytical process actually goes under another name called “business intelligence” so if you see that reference it’s kind of the same thing. When it comes to re-admissions too, we have the same thing, folks looking for that magical algorithm that will be the cure and granted information and studies help but there’s still a lot of human judgment here with ethics that will make a program effective in this area. You might wonder how HCA is doing in this area too, but no mention here with this article, but let’s get an algorithm put together and see what they are doing:) This is of extreme interest as some hospitals are running short of operating money and are closing and filing bankruptcy while we have this extreme on the other side. The algorithms again in the for profit business move the money. BD
In fact, profits at the health care industry giant HCA , which controls 163 hospitals from New Hampshire to California, have soared , far outpacing those of most of its competitors.
The big winners have been three private equity firms — including Bain Capital , co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.
In one instance, HCA executives said a private insurer, which it declined to name, questioned the new billing system, forcing it to return some of the money it had collected.
The hospital giant also adopted a policy meant to address an issue that bedevils hospitals nationwide — reducing costs and overcrowding in its emergency rooms. For years, the hospital emergency room has been used by the uninsured as a de facto doctor’s office — a place for even the most minor of ailments. But emergency care is expensive and has become increasingly burdensome to hospitals in the last decade because of the rising number of uninsured patients.
Many doctors interviewed at various HCA facilities said they had felt increased pressure to focus on profits under the private equity ownership. “Their profits are going through the roof, but, unfortunately, it’s occurring at the expense of patients,” said Dr. Abraham Awwad, a kidney specialist in St. Petersburg, Fla., whose complaints over the safety of the dialysis programs at two HCA-owned hospitals prompted state investigations.
Columbia/HCA became the target of a widespread fraud investigation in the late 1990s, which led to one of the largest Medicare settlements ever. Mr. Scott was removed as chief executive by the board, but was never accused by regulators of wrongdoing.
For individual HCA hospitals, the change made a big difference. At Riverside Community Hospital in California, Medicare reimbursements for the highest classifications surged to $949,000 in 2010, from $48,000 in 2006. Likewise, at Kendall Regional Medical Center in Miami, Medicare payments jumped to $1.5 million from $69,000. In a conference call in early 2009 with Wall Street analysts, HCA’s executives said that the change in the billing system had increased the company’s adjusted earnings by about 7 percent, or $75 million to $100 million, in a single quarter.
One doctor, who asked not to be identified because he still works as an emergency physician, recalled one episode in which he was told to turn away a young boy with a deep cut in his arm because it was not bleeding profusely and he therefore did not meet the criteria.
“Physicians had a really, really hard time with it,” said Dr. J. Patrick Pearsall, who worked for an emergency physician group based in Houston that worked in HCA hospitals. When the doctors failed to meet the hospital’s goals for how many patients should be considered emergencies, “they really started putting pressure on.”