The Hospital Systems Survey and accompanying article, "Profitability a matter of ownership status" (June 12, p. 24), reflects the type of reporting that does more harm than good to the industry. The report misleads the reader into believing that operations under the Balanced Budget Act of 1997 are more lucrative for some industry segments or individual providers. Nothing could be further from reality.
Virtually every hospital has been faced with reductions in Medicare reimbursements as a result of the budget law. Some hospitals were simply better positioned to absorb the payment cuts by reducing costs and improving efficiency. And some healthcare organizations began taking appropriate actions to respond to budget-law payment cuts sooner than others.
For a clearer picture of the reality of financial results over time, additional data should be collected. For example, net patient revenue per adjusted day and operating expense per adjusted day on a comparative basis would reveal the dynamics of changes in volume as well as expenses. Such data would still be less than perfect but far better than the emphasis placed on the bottom line, which doesn't reflect such dynamics.
Partner, Healthcare Services