Spokane7
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March 5, 2011 in City
Counting the costs of care
Spokane’s large hospitals try to mix compassion with prudence while hard times push patients into reliance on free services
Chris O’Neel masks window frames for a series of cubicles Friday on the ninth floor of the Deaconess Health and Education building, one of the sites where Rockwood Clinic doctors will move.
(Full-size photo)
Spokane County’s hospitals provided $128.1 million in free medical care to the region’s poorest people last year as unemployment, chronic disease and the high cost of health care continue to collide.
The total includes $69.6 million in charity care – medical costs that are written off by the hospitals because people can’t afford care, according to financial disclosure forms filed with Washington state. Another $58.5 million is considered bad debt, or unpaid bills that often snare the working poor.
The struggle to absorb these rising costs has become a common refrain for Spokane County’s four main hospitals. And it’s only going to worsen as government budget cutters turn to Medicaid and other health care programs, health care executives say.
Yet the county’s hospitals – with the exception of Deaconess Medical Center – all reported positive earnings, or profits, in 2010, according to reports filed with the Washington State Department of Health.
Providence Sacred Heart Medical Center’s dominance in the local market was highlighted by the data. With 644 beds and a payroll exceeding $244 million last year, Sacred Heart admitted 33,000 people, more than all the other hospitals combined.
The hospital envisions growing even bigger in the next several years if it can win expansion rights with state regulators.
Sacred Heart’s big numbers also include this: The nonprofit hospital reported a $35.2 million operating margin last year. In the business world such profits might be upstreamed to shareholders.
For Sacred Heart, said vice president of communications Sharon Fairchild, the money will be cycled back into the region in the form of charitable giving, construction projects and subsidized health services. Despite strong financial performance, Sacred Heart has in the past year laid off employees, shuffled staff and eliminated some programs.
The financial data collected by the state health department don’t account for Sacred Heart’s broader role as the centerpiece of Providence’s health care service in Eastern Washington, Fairchild said.
“You have to look at us as a complete, comprehensive, coordinated health care system,” she said, that includes several hospitals, nursing homes, medical research efforts, specialized trauma and children’s care, and other expensive programs and initiatives. Some of those services are included in the hospital’s financial figures, but Providence’s total impact on the community isn’t reflected in the numbers, Fairchild said.
Providence publishes a “community benefit report” every year that outlines how it compensates for some tax breaks afforded nonprofits by reinvesting in the community. Its $39 million worth of charity care is included in that equation.
And so is the $18 million worth of charity care given away by Holy Family despite logging an operating margin of $1.6 million.
As Sacred Heart continues to lead the region’s medical care, Deaconess Medical Center is emerging from its near financial collapse of three years ago.
Now owned by Community Health Systems Inc., the region’s second-largest hospital shaved its losses to about $520,000 last year and still gave away $7.7 million worth of hospital care to the poor.
William Gilbert, chief executive of Deaconess, anticipates turning a profit in 2011 and bolstering services to the poor at the same time.
“We think because of the commitments we have made that we will turn that corner,” he said. “We’re moving in the right direction.”
The hospital is still in the process of aligning with the Rockwood Clinic in a far-reaching deal that should help ensure a steady flow of insured patients with needed hospital care.
Deaconess is in the process of remodeling the top floors of its health and education building to house Rockwood’s cardiology, urology and general surgery services, along with newly acquired Inland Cardiology Associates.
While Deaconess lags far behind Sacred Heart in terms of charity care, profits, patients and nearly every other financial measure, state health regulators said they were impressed with the hospital’s major investments in technology, equipment upgrades and building improvements.
Community Health’s purchase of Deaconess and Valley Hospital and Medical Center came with pledges that the hospitals would continue their legacy of caring for the poor.
Specifically, Deaconess and Valley agreed to make every reasonable effort to meet or beat the community’s average cost of providing charity care.
Deaconess has fallen a bit short, state health officials acknowledged recently.
Yet the hospital is moving in the right direction.
Bart Eggen, executive manager of the health department’s office for certification and technical support, said his office notes the charity care numbers and guidelines and said Deaconess is already offering more charity care to patients under the new owners than the hospital did when it teetered on the verge of bankruptcy in 2007 and 2008.
“We’re pleased to see Deaconess make progress,” he said.
As Deaconess attempts to rebound, its sister facility, Valley Hospital and Medical Center, posted strong results for 2010. Valley earned a $5.6 million profit and gave away $4.8 million in charity care and absorbed $8.3 million in bad debts.
Parishes giving $1.5 million toward settling sex cases 
ChefGus/ John Olsen on March 05 at 4:51 a.m.
As a person who knows many of the indigent and low income folks that do rely on the care from these institutions I can only say “Thank You” for caring… the quality of medical care provided to all of the folks that I’ve known personally has been the highest caliber and always given with grace and kindness.
It is even part of the stated mission of Sacred Heart to provide this sort of care.
It is an odd quirk that the abject poor can and do get health care “provided” to them, just by being a citizen in need… yet folks that do have some minimal health insurance coverage of their own, often end up with huge bills and often are bankrupted by caring for their family members. John
greyhound2 on March 05 at 7:52 a.m.
The United States has the most expensive healhcare system in the world at 16% Gross Domestic Product (GDP), yet ranks a miserable 37th in the quality of care delivered to the average citizen, according to the UN WHO.
The country which ranks 1st place in quality only spends about 8% of GDP, or about half. The recent alledged reform does little more than put a bandaid on an open wound and nothing to curb costs. Some say the United States has the best in the world, which is only wishful thinking on their part.
johnclarke on March 05 at 8:01 a.m.
Thanks for your comments ChefGus and yes greyhound, I agree the reform did not go far enough.
bdr on March 05 at 8:52 a.m.
Obviously the hospitals end of tally’s greatly exceed the cost.
when you consider only 50% of the good paying people have been shorted by 128.1 million in free care and $35.2 million in investor gravy (who by all means should be bankrupt now, without tarp).
The only business that could stay in business after losing 128.1 million is Bernie Maidoff.
hawken on March 05 at 10:15 a.m.
So, if we multipy these numbers by tens of thousands of hospitals across the country, that likewise, provide “charity” health care at their expense, I’m thinking that is really cutting into the 44 million who don’t have health care insurance, but do get the best health care in the world, FREE.
I’ll take the charge down costs to my health care policy, for those who get the FREE care, over the $3 Trillion cost of Obamacare, socialized medicine, over the next 10 yrs…. every day of the week.
Not to say that we don’t need, “intelligent,” heal care reform. We do.
However, the Obamacare boondoggle is “antithetical” to “intelligent.” It’s design is nothing more than a grab for more power by liberal, big government, over our personal lives.
hawken on March 05 at 10:18 a.m.
BTW: Republicans have a whole list of “intelligent” ideas for health care reform.
Of course, when Obamacare was shoved down our screaming throats, against out will, Republicans were not allowed a seat at the table in the Obamacare fiasco. As you recall, the liberals controlled the white house, house and senate at the time.
Dazzeetrader11 on March 05 at 11:34 a.m.
The myth of poor folks not being taken care of is debunked with this report. It doesn’t happen. Healthcare of rthe indigent goes on in many areas….ER’s, bad debt resolution, free clinics for medical and dental care, etc.
Obama’s numbers were never truthful. Dems tried to make an issue and sold the idea that FREE healthcare would result in better health and longer lives. Not true. No matter though, Obamacare is a completely unnecessary concept. It’ll cost much and give nothing back….but more government control of your money and your rights.
Pubs don’t like it and Dems seem to love it. It’s a bill of goods. Pubs are right on their position. The fight over healthcare being a “right” is a false argument. Doesn’t matter if it’s a right or not, hospitals, MD’s and Dents.will take care of you with or without health insurance. It’s confirmed in this article.
nslopeofw on March 05 at 1:48 p.m.
This whole thing still stinks. I guess its good that our local hospitals (as well as all the hospitals nation wide) provide this service.
Until recently, i was one of those against the emergency room fix for those without insurance. Now, after a few of my uninsured relatives have had life saving services provided that they could not pay for, is see some merit.
I like the idea that the hospitals make it part of their mission, and volunteer these services. Too bad our government doesnt allow its citizens those same rights. If it were voluntary, then those of us that wanted to help could, while those that dont want to, or cant afford to, wouldnt have to.
Even though this is good for life saving services, the free care should be regulated to those in dire need, and children. The rest should have to pay.
hawken on March 05 at 2:56 p.m.
One thing that none from the liberal left have acknowledged is the the “charity” of the evil, greedy, health care corporations, the hospitals. How about some ‘love?’