Hospitals are hurting. Boo hoo

Our health care system is market driven. Every player—insurers, hospitals, pharmaceutical companies, doctors—must have a profitable, self-sustaining, business model. Like hotels, hospitals aim to keep their beds full with well-paying customers in need of knee replacements or heart procedures. Even though, in 2017, the CDC warned of the need to stockpile supplies such as ventilators and protective gear, the warning was ignored. Because stockpiling offers no return on investment, hospitals have zero incentive to do so. That’s the reason for the shortage of these items.  There's no money in being prepared for a pandemic.

Because they’ve had to postpone lucrative elective surgeries, hospitals will receive tens of billions of dollars as part of the coronavirus relief package. But get this: at least half of the top 10 recipients have paid millions in penalties for improper billing and other shady practices. For example, the Florida Cancer Specialists and Research Institute, one of the nation’s largest oncology practices, recently received a $100 million penalty for engaging in a nearly two-decade-long antitrust scheme to suppress competition. Nevertheless, it received more than $67 million in bailout funds. Dignity Health, the hospital conglomerate in my area, received $180.3 million in bailout funds despite having submitted false claims to Medicare and TriCare, the military health care program.

Many of the big hospital conglomerates have huge cash reserves, but receive bailout money anyway. The Providence Health System, which received $509 million, is sitting on nearly $12 billion cash, which, when invested, yields $1 billion in profits. Mayo Clinic has also lost money. Things are so bad it had to dip into its $10.6 billion cash reserves and investments. Boo hoo.

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