VHA and SunHealth Alliance have joined forces to aid their not-for-profit hospital members, who say they're being mistreated by for-profit hospital chains.
In a cooperative venture announced last week, the two hospital alliances said they will begin an education and information campaign to convince the public-and presumably some wavering not-for-profit boards-that not-for-profit hospitals offer better value than for-profits.
VHA President C. Thomas Smith and SunHealth President Ben W. Latimer didn't specifically blame Columbia/HCA Healthcare Corp., the nation's largest investor-owned hospital chain, for casting doubt on the work of not-for-profit hospitals to improve community health.
But Smith and Latimer, in a video-teleconference with MODERN HEALTHCARE, said the public, the general media and legislators have been given a somewhat negative impression of not-for-profit hospitals in recent years.
They said Columbia/HCA poses the biggest threat to the not-for-profit sector in 30 years because of its unrelenting publicity machine and acquisition binge.
Combined, the alliances represent more than 1,400 not-for-profit hospitals nationwide.
But representatives of the investor-owned sector said the not-for-profits' campaign will backfire because purchasers of hospital services will see through the rhetoric.
"This is not a battle that is being waged or instigated by investor-owned hospitals," said Ralph Glatfelter, president of the Florida League of Hospitals, a trade group representing for-profit hospitals in the state. He said those looking into the benefits provided by not-for-profit hospitals are communities, members of Congress and some attorneys general.
He acknowledged that investor-owned hospitals have lobbied for changes in tax laws that favor not-for-profit hospitals.
Columbia/HCA spokeswoman Lindy Richardson said the chain's position is that if a hospital provides charity care, it should receive tax relief, regardless of ownership status.
The war of words is reminiscent of the early 1980s, when the industry saw rapid growth of for-profit chains such as HCA-Hospital Corporation of America and Humana, and many futurists predicted the market would be divided into several mega-systems.
Last month, Columbia/HCA pushed the debate into the national spotlight with a series of television ads in which Chief Executive Officer Richard Scott extolled the value of his "tax-paying" hospitals and promised to lower health costs and improve quality.
Other tactics that have annoyed the not-for-profit sector include Columbia/HCA's practice of putting the hard sell on not-for-profit hospitals the chain wants to add to its fold. Its tactics include direct contact with hospital board members, physicians and local business leaders.
Over the past two years, Columbia/HCA has issued reports and statements contending that not-for-profit hospitals don't deserve their exemptions from income and real estate taxes because they fail to provide commensurate charity care.
The alliances aren't the only ones disturbed. Last month, Cardinal Joseph Bernardin of the Roman Catholic Archdiocese of Chicago noted the growing commercialization of healthcare (Jan. 16, p. 8) and called on not-for-profit hospitals to unite and reject lucrative takeover offers by for-profit chains.
In the past year, Columbia/HCA has announced acquisitions of nearly a dozen not-for-profit hospitals, including some VHA or SunHealth members. And Emory University in Atlanta, a SunHealth member, initially agreed to-but then backed out of-a plan to sell an interest in one of its two hospitals to Columbia/HCA.
Part of the alliances' strategy will be to persuade not-for-profit hospitals that are considering selling to a chain to choose other options.
"We have done that in the past, and we will do it more," Smith said.
Daniel Bourque, VHA's vice president for information and research, said some hospitals have requested information from VHA before making a decision on a possible sale. "We talk about what VHA can do, and what OrNda (HealthCorp) and Columbia are about," Bourque said.
Alliance executives said some not for-profits have sold because of unsubstantiated fears that Columbia/HCA's clout could shut them out of managed-care contracting and eventually threaten their survival.
Latimer said too many communities and hospital boards forget that investor-owned chains are primarily responsible for delivering profits to shareholders and boosting stock prices.
Not-for-profit hospitals, on the other hand, feel a greater responsibility to use profits to improve public health, Latimer said.
He also criticized "tremendous turnover" among investor-owned hospitals. "We don't know if the chains will be around in the community. Not-for-profit hospitals aren't going anywhere," he said.
VHA and SunHealth also released a report on 205 hospitals in Florida, indicating what they consider key differences between the two sectors. The report said for-profit hospitals in Florida charge higher prices than not-for-profits despite providing less charity care, treating fewer Medicaid recipients and offering less specialized care.
Glatfelter countered that investor-owned hospitals contributed to the tax base.
"(Not-for-profit) hospitals in Florida were exempt from $273 million in federal, state and local taxes," he said. "Those same hospitals provided charity care that cost them $150 million. That's why they are nervous. Investor-owned hospitals are providing a positive community benefit."
But, Latimer said, "there are also differences in business strategies-where capital investments will be made, how much profit is required and what it will be used for, and what community health needs will be addressed."
Smith also said if investor-owned chains like Columbia/HCA revive their efforts to change state or federal laws governing tax exemptions, the alliances will take their advocacy efforts to legislatures.
"We will do whatever it takes," Latimer said.