CtW drew on that research in a February 2010 letter that it wrote to Prime's landlord, Medical Properties Trust, a healthcare real estate investment trust based in Birmingham, Ala. That letter also was copied to HHS' inspector general's office. The research also formed the basis of a more formal report that SEIU-UHW West published in October 2010, Weisberg said (See chart).
“We're raising these numbers. Anybody can check these numbers,” Weisberg said. “Somebody's got to get to the bottom of it.”
Weisberg said he did not participate in the research conducted for CtW on Community, but added that he used to lead the team of analysts who produced it.
Per Olstad, financial initiatives manager for CtW, said he knows the group's motivation is going to be dismissed by some as mere “union animus” toward employers, but he added that copying the inspector general's office was not an attempt to be antagonistic. “When you have research that rises to this level of concern, I don't know why you wouldn't communicate that to regulators as well as the company,” Olstad said. “If there is a ready explanation for the concerns, then the explanation will satisfy the regulators as well.”
Medical Properties Trust has responded to one request by CtW, in that MPT now makes disclosures regarding the compliance of the facilities it owns in California with seismic-safety laws, Olstad said.
If Community does not respond to CtW's call for a board investigating committee, CtW is likely to make a direct communication to fellow shareholders urging them to vote against some directors seeking re-election to the board, Olstad said. These include two directors who are members of the audit committee, as well as Larry Cash, executive vice president and chief financial officer, Olstad said. Community's annual shareholders' meeting is scheduled for May 17 in New York.
Community declined an interview request for this story. Prime, however, continued its denunciation of the union-backed reports. The company published a lengthy critique of the septicemia charges in October and then further detailed what it describes as extortion by the union in a news release in December. In an interview last week, Lex Reddy, Prime's CEO and brother-in-law of its chairman, Dr. Prem Reddy, repeated those charges: “It is nothing but extortion. We have stood by that.”
Prime insists that the high rates of septicemia are not driven by hospital-acquired infections but based on its patient population presenting with symptoms of sepsis on admission to the emergency room. Prime hospitals exhibit higher rates of septicemia on presentment because of its business model, said Mike Sarrao, vice president and general counsel. The company does not contract with many managed-care plans, so its Medicare admissions are mostly through the emergency room, and many of those patients come from skilled-nursing facilities, where septicemia rates are higher than among the Medicare population as a whole, Prime contends.
Weisberg argues that his studies have controlled for these variables and still found many Prime hospitals with septicemia rates far above average. “It's just their claim,” he said. “If the bills are due to upcoding, then the statement that they are community-acquired is worth no more than the claim itself.”
Matt Austin, director of the annual hospital survey conducted by the Leapfrog Group, said the use of clinical statistics in these commercial disputes and the bickering over their meaning has not caused any of the hospitals that participate in the survey to waiver in their commitment to transparency. Purchasers still value the data, and it does not make the murky waters of health information any worse for consumers, Austin said. “Not to be flippant,” he said, “but I think they were muddied already.”
Sometimes there are limitations to the data that stymie efforts to draw significant conclusions no matter what the motivation of the researcher, Austin said. “You can take any data point and use it to serve the purpose that you're trying to serve,” he said. “As a collective whole, we have to be careful about using data and make sure that we're not drawing interpretations that are improper.”