Recognizing that bad news sells, the hospital lobby can't get the word out fast enough about its members.
A spate of reports about ailing hospital finances is the latest strategy national and state hospital associations are using to persuade lawmakers to loosen the Medicare and Medicaid purse strings.
These reports typically seize on worst-case examples, such as hospital closures, and detail the wounds that government payment reductions have caused.
A number of money-losing hospitals and healthcare systems also are releasing startling news about their finances (See story p. 24).
These gloomy financial reports are another example of the kind of grass-roots lobbying that last year helped providers win passage of legislation that boosts Medicare and Medicaid payments by $16 billion over five years. The American Hospital Association and its members want another $25 billion in relief this year.
Reports coming from local and state hospital associations complement the efforts of national groups.
For example, an annual statewide survey by the Hospital and Healthsystem Association of Pennsylvania demonstrated "a marked deterioration in Pennsylvania hospitals' financial health" because of the federal Balanced Budget Act of 1997.
"It really helps to just paint a more accurate picture of what the impact looks like around the United States," said Carmela Coyle, the AHA's senior vice president for policy. "When you go in to talk to a member of Congress, you want to be able to tell them the impact on their constituents."
Coyle said the AHA didn't require state associations to produce reports about their members. Not all associations have the capability to do that, she said.
"We have tried to encourage everyone to . . . tell your story in the best way you can," Coyle said.
The financial troubles of local hospitals have been known to sway Washington lawmakers, who "are extremely sensitive to these sorts of complaints," said Judy Feder, dean of policy studies at Georgetown University in Washington.
In the battle for dollars, hospitals have learned the power of documentation.
Last year's successful lobbying crusade, for instance, included an onslaught of testimonials to members of Congress from local hospitals, which described how payment reductions in the balanced-budget law hurt.
"It's not enough for hospitals to say we do good work and we need more resources," said Kevin Smith, a consultant to the Massachusetts Council of Community Hospitals, a statewide advocacy group that represents 26 community hospitals and healthcare systems.
Members of the council went to Washington last week to meet with the Massachusetts congressional delegation, including Democratic Sen. Edward Kennedy, to discuss the results of a study they commissioned, which concluded: "(Massachusetts) community hospitals are in serious financial distress-worse than the rest of the U.S."
Economist Edward Moscovitch in Gloucester, Mass., wrote the report for the council. The report predicts hospitals will lose $300 million over the next two years. It also examined Massachusetts' hospital spending, use and capacity.
Council President Robert Fanning Jr. said having such a report helps lobbying efforts. "Otherwise, you're talking about generalities," said Fanning, who also is president and chief executive officer of three-hospital Northeast Health Systems, headquartered in Beverly, Mass.
These reports come in handy in proving damage, said Joseph Coatsworth, vice president for government relations at the Connecticut Hospital Association.
Earlier this month, the association released a report by the Falls Church, Va.-based Lewin Group consulting and research firm, which analyzed effects of Connecticut's Medicaid program on hospitals.
The report is aimed at state lawmakers, Coatsworth said, in hopes that they will address Medicaid payment shortfalls, which cost the state's 31 acute-care hospitals $148 million last year. The report said Connecticut hospitals collect just 70 cents for every $1 they spend to treat a Medicaid patient.
Coatsworth knows that an independent consultant's report is no guarantee of lobbying success. "It doesn't mean anything is going to change, but it means you're right, and someone independently will put their reputation on the line and say these are the true facts," he said.
But reports handed out by hospital associations may not always paint the full picture.
For example, Feder, of Georgetown University, said that although a report can show hospital expenses outpacing revenue, the hospital's "costs are not necessarily outside their control."
"Costs are not some given that come down from the sky," she said. "These are management choices."
Feder said that "more thoughtful analysis" often comes from groups such as the Medicare Payment Advisory Commission.
MedPAC recently said overall hospital margins fell to 2.7% in 1999 from 6% in 1997. But MedPAC's analysis showed that private payers drove more of the decline than Medicare (March 20, p. 6).
The federal budget law is behind troubles in Pennsylvania, according to the state hospital association, which recently issued two reports on that state's hospital finances. The association hopes to catch the attention of the public as well as federal and state lawmakers.
Its statewide survey garnered 141 hospital responses, which said:
* Four out of five Pennsylvania hospitals can't cover operating expenses with patient revenue.
* Some 70% suffered a decrease in profits in fiscal 1999.
* About 69% are operating with net profit margins below 4%.
The second report, done by the Lewin Group, looked at Medicaid hospital reimbursement in Pennsylvania.
The study found that Pennsylvania hospitals are paid 77 cents for every $1 it costs to treat a Medicaid patient, ranking Pennsylvania 45th in reimbursements among the states.
Hospital association President Carolyn Scanlan said she knows some critics might say these reports are alarmist.
"But I think prudent people are beginning to be concerned that where there's a lot of smoke there may actually be fire, and there's a lot of smoke in this state and across the country," Scanlan said.