I enjoyed reading "Chasm grows between rich and poor (hospitals)" (June 7, p. 34) and Kenneth Robbins' response in a letter to the editor (June 21, p. 102).
The article quotes William Cleverley, president of the Center for Healthcare Industry Performance Studies, as saying, "The critical issue (affecting hospitals' future ability to meet capital requirements) is the amount of profit earned in relation to the investment employed in the business."
Robbins says, "The fact that these (small urban) hospitals are losing money is a reflection of their missions, the neighborhoods they serve and government underpayment, not their performance."
They are both right. The "true" value that tax-exempts add should be measured according to their "total community value," or the combination of economic return above investments and the cost of providing their missions. Only when we start measuring and rewarding both ends of the equation can we evaluate the true long-term value created by these organizations.
Additionally, we cannot forget that "mission" has a cost and should be delivered as prudently as any other investment.
Partner, Ernst & Young
Practice leader, Healthcare Human Resources Consulting