By Grace Vitaglione, Carolina Public Press
Staff cuts have driven up patient-care profits at Mission Hospital in Asheville after HCA Healthcare acquired the facility, according to a draft report by Mark Hall, director of the health law and policy program at Wake Forest University.
The report tracked the hospital’s profits from 2011 to 2022 and compared its profit margin to 11 peer hospitals. HCA acquired then-nonprofit Mission Health System in 2019. During the height of the COVID-19 pandemic in 2020, the hospital reported losses, according to Hall’s report.
But Mission Hospital rebounded and in 2022, it reported patient-care profits of almost $100 million – about 3.5 times its profits of the year before HCA’s purchase, the report said.
HCA reduced patient-care costs by cutting the patient-care staffing rate from 6.0 full-time equivalent staff per occupied bed in 2018 to 3.7 in 2021, the report said. Meanwhile, average staffing at other N.C. hospitals stayed at 5.1 per patient, according to the report.
The report used data from hospital “cost reports” filed with the federal government. Hall compared Mission with peer hospitals based on size, scope of service and market and geographic location.
That comparison is how Hall found that staff cuts were the primary driver behind Mission’s profits under HCA, he said. Prior to the acquisition, Mission’s patient-care profit margin was on par with the average among peer hospitals, but its profits are now at the top of the range, according to the report.
“We know that this is not mere correlation, that the purchase by HCA appears to be the real cause of this change,” Hall said.
Price increases and profits
Increasing prices is another way to drive profit, but HCA has limited control over that, Hall said.
Many of Mission Hospital’s patients are covered by Medicare or Medicaid, in which the government “essentially sets prices,” the report said. Blue Cross and Blue Shield of North Carolina also has a large share of the private insurance market, giving the company leverage to combat price increases, according to the report.
For those who don’t fall under those categories, such as those with smaller insurance companies or who are uninsured, hospitals can mark up prices, the report said.
Mission raised its price markups at an average annual increase of 16 percent points from 2011 to 2018, the report said, but that doubled under HCA to an average increase of 33 percent points a year. That put Mission at the top of the range of peer hospitals, according to the report.
Complaints about increased prices were also raised in antitrust suits against HCA by North Carolina plaintiffs.
Despite that, most patients don’t pay the full amounts, the report said, so this doesn’t account for most of the increased profits.
‘Wishful thinking’ on profits
Prior to the acquisition, Mission’s board members “appeared to believe, based on what they had been told,” that HCA was going to improve financial performance through “back-office efficiencies” and cost savings on things like supplies, the report said.
While good data to isolate this is lacking, for those areas to be the main source of savings would be unlikely, the report said. Mission reported much of its total expenses were concentrated in labor costs in a certificate-of-need application submitted to the state in 2022, according to the report.
When asked by Carolina Public Press whether board members were misled about HCA’s plans for Mission, Hall said, “It certainly appears to be wishful thinking.”
Michael Messino, a retired physician who founded Messino Cancer Centers, is part of a coalition of advocates and elected officials following developments at Mission Hospital. He said HCA will never be able to fix issues at the hospital because their profit-oriented model means they’re not willing to hire enough staff.
Messino also pointed to the salaries of top administrators at HCA. CEO Sam Hazen’s total compensation in 2023 was $21,315,984, according to a proxy statement for an annual stockholders meeting filed with the U.S. Securities and Exchange Commission.
Union negotiations
Union members of National Nurses United are currently negotiating a new contract with HCA, including at Mission Hospital.
Hannah Drummond, a Mission nurse and union member, said the main goals of the negotiations are increased staffing and retention, meal and rest breaks and protections around how technology is implemented in the hospital.
Even if a nurse at Mission is not a part of the union, the negotiations will affect them, and union support among staff is high, she said.
“We feel really good going into these contract negotiations, to push them to do what’s right,” she said.
Mission met union bargaining representatives at the table once and will do so again on Friday, May 3, Drummond said. As it’s still early in the process, they haven’t reached any tentative agreements yet, she said.
The current contract expires July 2, and if HCA does not bargain in good faith to reach an agreement, a strike is a possibility on which the nurses would vote, she said. If that were to happen, the union would give a 10-day notice so the hospital could plan for patient care.
The hospital has been telling management that the union is going to strike, she said, but whether a strike happens or not is up to HCA.
“If they’re spreading that message everywhere, that tells us that they’re not really intending to bargain in good faith,” she said.
The union’s protections have allowed nurses to raise concerns, leading to accountability measures taken by the government, Drummond said.
“All these stories are being told because we became union nurses who formed our union here, and have been ringing the bell and blowing the whistle,” she said.
HCA response
In response as to whether the hospital is telling management that the union is going to strike, HCA spokesperson Nancy Lindell wrote in an email, “We have just begun contract discussions and we know that strikes are a possibility in any labor negotiation and this negotiation is no different.
“The hospital is prepared in the unfortunate event that the union calls for a strike, as National Nurses United is known to do.”
Lindell wrote concerning Hall’s report, “This writing was funded by a group that is funding litigation against Mission Health. It is not an impartial ‘study,’ and it does not justify comment or response.”
Hall’s work is funded through a grant from philanthropic group Arnold Ventures to Wake Forest University. Arnold Ventures also supports some “impact litigation,” the report said, which includes a public-interest law firm that is currently suing HCA Mission on antitrust issues.
Hall said the research team has no connection with the litigation and Arnold Ventures has no control or input in the report.
Editor’s note: Carolina Public Press has also received general financial support from Arnold Ventures, as it does from many philanthropic groups. That funding in no way influences the content of CPP’s journalistic endeavors, including this article.
This article first appeared on Carolina Public Press and is republished here under a Creative Commons license.
