Rep. John LaFalce (D-N.Y.) has a handful of small, troubled hospitals in his congressional backyard. One of them, Lockport (N.Y.) Memorial Hospital, is mortgaged to the hilt, in arrears to vendors and on the brink of bankruptcy (Aug. 9, p. 26).
So it's only natural this western New York lawmaker is leading the charge to bring home the bacon for the nation's financially distressed community hospitals. LaFalce's Community Hospital Preservation Act would authorize HHS to make forgivable capital loans of $100,000 to $2.5 million per hospital.
There are, of course, a few strings attached. Eligible hospitals must pony up a matching amount of state, local or private money. The loans become forgivable when hospitals meet certain criteria, such as achieving specified operational efficiencies annually.
The bill gives the Federal Housing Administration, a unit of the U.S. Department of Housing and Urban Development, a hand in approving loans for hospitals like Lockport, which is insured by the FHA. Whether the Clinton administration will go for it is another matter. But if anyone can grease the wheels, apparently it's LaFalce.
Earlier this year, the congressman helped bail out Lockport by persuading HUD to release close to $3 million in funds the hospital deposited with the federal government under an FHA mortgage guarantee agreement. HUD forked over the cash despite its objections to the way the state is handling financially distressed hospitals. Lockport has $14 million of long-term debt issued by the Dormitory Authority of New York State.
In a biting letter to authority Chairman Gail Gordon this spring, HUD Assistant Secretary William Apgar warned that the state's inaction could cause tightened underwriting standards for new guarantees of New York hospital mortgages and a potential downgrading of the state's and the authority's bond ratings.
Firing back, Gordon called HUD's threat "wholly unwarranted" and berated the agency's "restrictive and archaic" mortgage guarantee regulations for tying up millions in New York hospital money-just as they had with Lockport.
While Lockport's interim manager, Intensive Resource Group, crunched the numbers behind the HUD deal, LaFalce really made the deal happen, says Lockport board Chairman George Muscato. The key meeting with HUD occurred just hours after the congressman's return from a trip to Mexico with President Clinton.
He's shocked, shocked. Fortney "Pete" Stark, the California Democratic congressman known for hyperbole, fired a shot last week at the United Network for Organ Sharing that may have been a bit late and wide of the mark.
Stark said in a written statement that he was "appalled" to discover in a government report that UNOS, which allocates organs for transplant, overcharged HCFA $124,829 for "unallowable costs" and that another $25,229 should not have been claimed for reimbursement in fiscal 1996. This overbilling amounts to roughly the cost of a single kidney transplant in the first year of care, but Stark also wrote: "Who knows what (UNOS has) done in fiscal 1999?"
UNOS says most of the discrepancy actually stemmed from an overconservative estimate of rent and expenses calculated over a three-year period, a practice that's since been rectified.
UNOS spokesman Robert Spieldenner went on to point out that the report, from HHS' inspector general's office, said the Richmond, Va.-based organization did $1.2 million in work for which it could have charged the government but didn't.
"Overall, the taxpayers got a good deal for their money. They got over $1 million of work for free," Spieldenner says.
But Stark wasn't finished. Noting that UNOS had spent $28,218 on lobbying in fiscal 1996, he wrote that he was "alarmed at the extent to which a government contractor is attempting to influence and undermine the legislative and regulatory processes. As both the (report) findings and those of others suggest, the federal government should be wary of contracting with UNOS."
Just for the record, in the 1996 election campaign, Stark collected $160,508 in political action committee contributions. And in 1997, 23 healthcare organizations spent at least 20 times what UNOS spent to influence Congress.
A woman's job? Eileen Silva writes in Network Marketing Lifestyles magazine (a home business periodical) that on a recent flight she sat next to a "distinguished-looking man from the Midwest" who turned out to be a hospital chief executive.
Making conversation, she asked him about the future of medicine. "Women," he answered.
As patients? "No, as doctors," he said. He explained that almost all the 300 physicians on his hospital's staff were men. "But I have never met a male doctor who went into medicine to save lives. Most went into medicine because years ago when they were choosing careers, it was the most lucrative, prestigious career you could find."
Women, however, "are nurturers," the hospital honcho said. "They think it's noble to save lives, and they are not just money-driven. As the incomes of physicians continue to drop, the percentage of women entering the field of medicine will continue to rise."
The hospital chief's anecdote is right on the money, according to the Association of American Medical Colleges, which reports that women made up 44.3% of first-year medical school students last fall. Ten years ago, they represented 36.8% of the class. The percentage of women in the entering class has increased every year since the early 1970s, when it was 11%.
Quotable. "It's hard for health plans not to be terrified about what's going to happen in the future regarding regulation of Medicare. . . . The government has been a notoriously bad business partner when it comes to the Medicare+Choice program."-Gail Wilensky, chairwoman of the Medicare Payment Advisory Commission, speaking Aug. 14 at the Dorsey Hughes Symposium in Beaver Creek, Colo. She discussed the future of Medicare and the challenges providers face under the Balanced Budget Act of 1997.