HOSPITALS: It’s not all financial woe in the big white building

Just a reminder from the Rocky Mountain News that plenty of hospitals are doing just fine.

A HealthOne hospital (a local JV with HCA) made a pre-tax margin of 25%! That’ll make some pharma companies jealous!

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  1. HCA being a publicly traded company, its margins are in the public domain, so I don’t see where there’d be a cause of action.
    And you’re right about the public perception of hospitals, although people are starting to catch on about the practical differences between for-profit and nonprofit entities.

  2. Rick,
    Insurance companies could be in breach of contract if they openly say to the public “we think this hospital has a profit margin of X” or even if they say that “this hospital is profitable.” At that point, the hospital has the right to sue the insurance company, not just for trying to say something it may not have the right to say, but for doing something that may constitute “steerage,” which none of the contracts allow. This is a problem everywhere – you can thank the AHA and the AMA for this, and for all the other reasons that hospitals don’t compete on price or value.
    In addition, even when the information is known, hospitals get more sympathy from the (totally igornant) public than insurance companies.

  3. Seeing how fat-and-happy HealthOne is, one has to wonder what would make UnitedHealth capitulate with them in their contentious contracting battle. I understand United may have been bleeding membership, losing it to CIGNA and Aetna among others. But it seems to me if United had more carefully orchestrated its media campaign during the contracting dispute, it might have come out better off.
    But then, nobody ever accused United of knowing how to effectively manage public perception.