Judge says HCA broke spending promises

By Diane Stafford
The Kansas City Star, January 24, 2013

The Health Care Foundation of Greater Kansas City has won a $162 million judgment against Hospital Corp. of America, owner of the largest hospital system in the Kansas City area.

The lawsuit contended that HCA hadn’t spent what it promised on capital improvements to the former Health Midwest hospitals that HCA bought for $1.13 billion in 2003. The lawsuit further claimed that HCA had not met its charitable health care commitments to help pay for treating indigent people.

The amounts that HCA agreed to spend within certain deadlines were part of the deal transferring the nonprofit Health Midwest hospitals to the for-profit HCA.

As agreed to by parties to the 2003 sale, the for-profit HCA was to make $450 million in capital improvements to the existing Health Midwest hospitals, which had been nonprofit institutions and needed significant upgrades.

HCA had agreed under terms of the sale to spend more than $650 million on charity health care in the Kansas City area, the judge noted in his decision. How far HCA has gone toward meeting that obligation will be scrutinized in the court-ordered audit.

But in his decision Thursday, (Judge John) Torrence said HCA’s financial accounting made it impossible to tell whether the company had met its charitable health care commitments.


Physicians for a National Health Program supports not only a much more efficient and equitable single payer financing system, we also support elimination of passive investors from the health care system. Corporate executives and boards that must place priorities of shareholders over patients should have no place in our health care system.

Hospital Corporation of America (HCA) is not only the largest private operator of health care facilities in the United States, it also holds the record for the largest fraud settlement, over $1.7 billion. This current judgement against HCA suggests that they continue to place a priority on profits over patients.

When HCA took over the largest hospital group in the Kansas City area, they agreed to upgrade the hospitals with much needed improvements, plus they agreed to continue to provide charity care as safety net institutions. This was in exchange for allowing them to convert these non-profit hospitals into for-profit facilities under their ownership.

Once gaining ownership, they reverted to business as usual – make money while ignoring the commitments made for charitable care and for improving the facilities. The $162 million judgment that they may have to pay (they are appealing it) to them is not much more than an expense of doing business, especially considering that their 2011 net income was $2.47 billion (adding considerably to Bain’s profits from their investment in HCA).

Although PNHP certainly objects to the diversion of profits to investors – profits that should go for patient care or to help lower costs – the primary reason that we believe that for-profit entities should be expelled from the health care system is the egregious behavior on the part of their corporate executives and board members in using patients as instruments in their quest for profits. In this instance it can be measured by the care that they avoided providing to indigent patients, and by the less than optimal care received by patients in their substandard facilities.

The next time you see a placard stating, “PATIENTS, NOT PROFITS,” keep in mind that it is not just profits, but it is the deeper significance of what corporate greed does to patient care.