Not-for-profit hospitals in Virginia charge less than for-profit hospitals for the same type of care despite giving more care to the poor and providing higher-cost services, a study by two not-for-profit hospital groups says.
It's the second state-specific report on hospital prices and services issued by VHA and SunHealth Alliance, two not-for-profit hospital alliances. The first report, released in February, hit Florida hospitals (Feb. 20, p. 2).
The pair teamed up earlier this year to battle claims by the investor-owned hospital community and Columbia/HCA Healthcare Corp. that for-profit hospitals provide a better value to their communities than do not-for-profit institutions.
One prong of the alliances' strategy is the public release of reports comparing charges and services of hospitals in the two ownership sectors.
Like the Florida report, the Virginia study shows that not-for-profit hospitals outshine for-profits in price, service and care for the poor.
The Virginia report also is noteworthy because it represents a retaliation for a report issued last fall by the Virginia Health Services Cost Review Council. That study showed that for-profit hospitals in the state provided more "community support" than did not-for-profit hospitals.
The state data commission measured community support by adding up a hospital's expenditures on charity care, bad debt and all taxes, and expressing it as a percentage of total expenses.
The inclusion of taxes pushed for-profits ahead of not-for-profits on the community-support ladder. However, when taxes were excluded from the calculations, not-for-profits devoted far more of their expenditures to charity care and bad debt (May 8, p. 28).
Still, executives of Columbia, the nation's largest investor-owned hospital chain, have pointed to the community-support figures as proof of how much more for-profit hospitals do for their communities. The chain's attempt to make taxes the financial equivalent of charity care and bad debt has drawn criticism from hospitals on both sides of the aisle (June 19, p. 130).
Columbia's reaction to the new alliance report is unknown. A spokeswoman in the company's corporate office in Nashville, Tenn., had no comment and referred inquiries to Columbia's Virginia office, but executives there were unavailable for comment.
The 10-page VHA-SunHealth report is based on data supplied to a state-mandated data-collection organization by 83 acute-care hospitals. Some 70 of the hospitals were not-for-profits, including publicly owned facilities. The data represent 328,000 inpatient bills for care provided during the first six months of 1994.
The report said charges at Virginia's for-profit hospitals were 30% higher than charges at not-for-profit hospitals for the same type of patient care. In 22 of the 24 medical service lines examined, for-profits' average charges per stay were higher than the not-for-profits', the alliances said. Prices were adjusted for a hospital's case mix and for patients' severity of illness.
For example, the average charge for an obstetrics stay was $9,707 at a for-profit hospital, compared with $7,337 at a not-for-profit hospital (See chart).
Some 10.3% of not-for-profits' charges represented care to Medicaid recipients, compared with 4.7% of the charges at for-profits, the report said.
The report also said not-for-profit hospitals in Virginia operated more than 90% of the costly high-technology services in the state, including heart, kidney, liver and bone marrow transplant procedures.