By Andrew Coates, M.D.
WAMC Northeast Public Radio, March 29, 2013
In a small news article this week in the New York Times, Nina Bernstein reported that a provision of the New York State budget to allow for-profit hospitals was been dropped after opposition from the Assembly leadership, specifically the intervention of Assemblyman Richard Gottfried, chair of the Assembly’s Health Committee.
While hospitals may be run as for-profit businesses in many states, all New York state hospitals are presently either not-for-profit or public institutions. Keeping for-profit hospital care out of New York is good news for people in New York who need hospital care and marks a successful defense of the public interest.
According to the Times’ Stephen Berger, “an investment banker who has long advised the state on health care” was behind the push.
Republican leaders in the New York State Senate proposed to expand the pilot project to allow 10 for-profit hospitals.
The New York State Nurses Association vigorously opposed the measure to allow for-profit hospitals in New York. The nurses organized a grassroots push of over 2,000 phone calls and hundreds of in-person visits to lawmakers, including a last-minute push of busloads of nurses traveling to Albany. Jill Furillo, executive director of the New York State Nurses Association, was quoted in the Times saying: “For-profit health care does not work. People in the Assembly listened to us, and so did Gov. Andrew Cuomo.”
Proponents of for-profit hospitals in New York, like Mr. Berger, point to the need for capital investment in the health care infrastructure.
Berger led a state-appointed committee in 2011 that recommended closing all public hospital beds in the borough. Investment in health care works for the investors, but it doesn’t work for the patients or the caregivers. Public money must ultimately fund the care of the vulnerable and the indigent. Allowing investment companies to take a cut increases costs and robs caregiving.
For-profit hospitals amount to bad public policy. For-profit hospitals have also been shown, in peer-reviewed policy science literature, to provide inferior quality when compared with their nonprofit counterparts. For-profit hospitals also lead to greater health spending than nonprofit ones.
Among the convincing research are studies by Dr. P.J. Devereaux and his team. When it comes to hospitals, Devereaux found that charges at for-profit hospitals were 19 percent greater than at their nonprofit counterparts. In a previous paper, Devereaux and colleagues showed that mortality — death rates — were 2 percent greater at for-profit hospitals.
A cardiologist, Devereaux practices and teaches and performs his research at McMaster University in Ontario, a world-renowned center for evidence-based medicine. Devereaux has also researched the question of for-profit dialysis centers and for-profit nursing homes.
When compared with nonprofit institutions, for-profit dialysis and for-profit nursing homes, like for-profit hospitals, are more expensive and more deadly than nonprofit ones.
Moving a hospital into the private sector shifts its fundamental purpose. A for-profit institution primarily exists to remunerate investors and shareholders. The public service model — or at the very least nonprofit, community-based institutions — still organizes care with a primary responsibility to patients and their caregivers.
During our lifetimes health care has been transformed from its charitable roots into a profit-seeking industry.
For-profits operate over 84 percent of home health care agencies and 85 percent of dialysis clinics. Ninety-six percent of the nation’s outpatient surgery centers are for-profit, a sector that has grown by more than a third since 2004. Hospice care has evolved into a $14 billion business, run mostly for-profit. For-profit hospice!
Over three-fourths of nursing homes are for-profit nursing homes — and the largest owner of for-profit nursing homes are private equity firms run by investment bankers. The exception has been hospitals, where nonprofits and publicly operated facilities had 88 percent of revenues in 2010.
I love our nursing colleagues. Judy Sheridan-Gonzalez, RN at Montefiore Medical Center and elected NYSNA leader, said: “We’ve won this battle, but our fight for New York patients is just beginning. Our opponents can re-introduce these changes as non-budget bills at any time this legislative session. That’s why we’re not letting down our guard.”
For-profit hospitals are bad public policy. But with the trend toward privatization — you might call it the profitization — of health care, the nurses’ public advocacy will remain as indispensable to the patient’s interests as their bedside care.
Dr. Andrew Coates practices internal medicine in upstate New York. He is president of Physicians for a National Health Program.
You can listen to Dr. Coates’ radio broadcast here: