Staff Cuts Boost Profits at Mission Hospital Following HCA Acquisition
In a revealing draft report authored by Mark Hall, director of the health law and policy program at Wake Forest University, it’s uncovered that staff cuts have significantly bolstered patient-care profits at Mission Hospital in Asheville, subsequent to its acquisition by HCA Healthcare.
Examining the Numbers
Hall’s report meticulously traced the hospital’s financial trajectory from 2011 to 2022, juxtaposing its profit margins against those of 11 peer hospitals. The acquisition by HCA in 2019 marked a turning point for the then-nonprofit Mission Health System. Despite facing losses during the peak of the COVID-19 pandemic in 2020, Mission Hospital rebounded remarkably. By 2022, it boasted patient-care profits nearing $100 million, a staggering 3.5-fold increase compared to pre-HCA numbers.
Staffing Strategies
One of the key revelations of the report was the substantial reduction in patient-care staffing rates orchestrated by HCA. From 6.0 full-time equivalent staff per occupied bed in 2018, Mission Hospital saw this figure plummet to 3.7 in 2021. This stands in stark contrast to the average staffing levels at other North Carolina hospitals, which remained at 5.1 per patient during the same period.
The Impact on Prices and Profits
While increasing prices could be a route to driving profits, the report highlights the constraints HCA faces in this realm. With a significant portion of Mission Hospital’s patient base covered by government programs like Medicare and Medicaid, pricing is essentially dictated by regulatory bodies. Moreover, Blue Cross and Blue Shield of North Carolina holds considerable sway in the private insurance market, acting as a check against excessive price hikes.
Despite these challenges, Mission Hospital saw a notable uptick in price markups following the HCA acquisition, with average annual increases doubling from 16 to 33 percentage points. This propelled Mission to the upper echelons of pricing among its peer hospitals.
Managing Expectations
Prior to the acquisition, there was optimism among Mission’s board members that HCA’s involvement would yield improved financial performance through operational efficiencies and cost-saving measures. However, the report suggests that such hopes may have been overly optimistic. While concrete data to confirm this assertion is scarce, it’s noted that labor costs constituted a significant portion of Mission’s expenses, casting doubt on the feasibility of substantial savings in other areas.
Conclusion
In light of these findings, it’s evident that staff cuts, rather than anticipated operational efficiencies, have been the primary driver behind Mission Hospital’s bolstered profits under HCA. This raises questions about the broader implications of profit-driven strategies in the healthcare sector and underscores the need for greater transparency and accountability in hospital management practices.
