Non Profit Hospitals: Are they becoming too focused on maximizing profits?

Within our healthcare system, there are
three types of hospitals which provide services for their surrounding communities. There are non-profit hospitals, for-profit hospitals, and government funded hospitals. The basic difference between these entities is that for profit hospitals strive to serve patients while still maximizing revenue for their shareholders, while non-profit hospitals are said to focus on providing charitable care to their community, and government funded hospitals also focus on serving the community through governmental funds. Through this network of facilities, most of the people within our country receive the proper care that they demand. While this system has worked well for many years, many non-profit hospitals are currently being scrutinized and accused of diverting from their main focus and instead making money more of a priority. If this were to be the case, this could potentially cause a plethora of problems because then these hospitals would be receiving tax breaks under the false pretense that their main focus is to serve the community rather than to make money.

There was a recent article posted in the Wall Street Journal that speaks about the recent trend in non profit hospitals in terms of revenues. As seen on the graph on the upper right, they show that hospitals have very drastically improved their net income, from $544 million dollars in 2001 to $4.27 billion dollars in 2006. They highlight the success of non profit hospitals such as Northwestern Memorial Hospital in Chicago, Cleveland Clinic, University of Pittsburg Medical Center, University of California at San Francisco Medical Center as well as a Catholic Healthcare West ( a system of hospitals in the San Francisco area). The authors point out that much of the income of these facilities has been dedicated to the renovation of their buildings, large payments to CEOs, and acquiring state of the art equipment, rather than on charitable care. While some of these expenses might seem somewhat deviated from the main purpose of serving those in need, I believe that we cannot be quick to judge all of these hospitals for spending the amount of money that they do in these areas without looking at the big picture. Non profit hospitals have always had to compete with for profit hospitals. As one of the writers for the Health Care Blog, Maggie Mahar (pictured left), stated in her blog post titled "Do non profit hospitals deserve their tax breaks?", non profit hospitals that are surrounded by a healthy mix of for profit hospitals are bound to act like for profit hospitals because they have to fight in the same market for the same patients. Although their main purpose is not to maximize income gains, money is necessary to run a hospital. It is no surprise that these hospitals mentioned above are paying money to renovate their facilities or to bring in state of the art equipment, because aesthetics and appearance of success is one of the ways in which hospitals can draw patients into their doors. While I am not condoning the focus of profit maximizing in non-profit hospitals, I am saying that perhaps a closer look at their total activity as a whole might be more beneficial and will give us a better understanding as to whether these hospitals are adhering to their primary mission of serving the community in need of care.

Because of all the fire that non profit hospitals have been receiving, the Internal Revenue Service has been very proactive in trying to investigate these cases and make sure all hospitals are complying with the community benefit standards that are required to qualify as a tax-exempt charity under section 501. Recently a study was done to show what the average activity was for most of the non profit hospitals in the United States. They were able to receive data from four hundred and eighty seven different non profit hospitals. I found it very interesting that the study found that these facilities were serving an average of 46 percent of people with insurance, 46 percent of people under government plans such as Medicaid and Medicare, and 7 percent with no insurance. I feel like these numbers really do show that on average, non profit hospitals really are helping a large part of the population who is in need. However, I do believe that Maggie does pose a good point when she say that perhaps the IRS should put a minimum requirement on charitable care in order for these non-profits to quality for tax exemptions, because at least we would then not doubt that they are providing at least a sufficient amount of help to the communities in need which they strive to serve. This would serve as a way to ensure that all of the money that our government spends on healthcare is being put to good use, and perhaps lead us into a future with a more efficient healthcare system.

Quaid Twins: Eye Openers to the Reality of Medical Errors

In late November 2007, the eyes of America were open to the reality of the threat of medical errors with the unfortunate experience of the Quaid twins. Dennis Quaid and his wife (pictured on the left) had put their two week old babies under the care of the staff of the Cedar Sinai Hospital, one of the most renowned hospitals in California. Little did they know that during the twins time at the hospital, they were going to be put under more danger than what they were admitted for. During one of the night shifts, the twins were administer a dosage of a blood thinner, Heparin, that was 1000 times what they needed. This put both twins into shock and they had to be transferred to the neonatal intensive care unit. There was another patient who also suffered the same problem, but their name was not disclosed. Fortunately, all three patients recovered from this medication error, and there are no signs of permanent damage. While the Quaid twins were able to survive this error, there have been other patients who have died from overdoses of Heparin. Though the Quaids are attributing this error to the pharmaceutical concepts, we must also considering the error in the delivery process administer by the hospital. It is the hospitals responsibility to ensure quality care to each patients, and thus should constantly be evaluating their performance so that errors such as these do not occur.

Even in a hospital as supreme in quality as Cedar Sinai Hospital, it is now evident that errors occur. In fact, according to the US Food and Drug Administration, 98,000 deaths a year can be accounted to medical errors. While the Quaid's are attributing this particular error to the pharmaceutical companies, it makes us wonder if there was anything the hospital could have done to prevent this error as well. Now a days, hospitals need to really begin to look at these problems internally and see what they can do to limit their liabilities without spending a surplus of money to prevent errors. For example, in the case of this overdose, perhaps if the person stocking the medicine realized that these two concentrations of the drug resembled each other, he or she could have made a sign to signal which vial was which, which would have probably been more cost efficient then they multiple days spent in the NICU and medicine to reverse the effects of Heparin.

If we look at the most frequent types of medication errors found within our hospitals, we can see that omission of a dosage is the most frequent. The bar graph on the right, provided by The Commonwealth Fund, a foundation which works to improve high performance in our health system, shows other causes as well. Improper dosage and prescription error are right below omission in frequency. All of these errors could potentially be solved, or at least reduced, by improving the systems performance of the hospital. Because more and more hospitals are realizing this concept, hospitals are moving towards a more factory based approach to reduce the number of mistakes within their practices.

One of the ways by which they are experimenting is by the use of the Six Sigma efforts, provided by General Electric. According to the Six Sigma Website, Six Sigma is a "measure of quality that strives near perfection". There are two processes by which this statistical measure can be achieved. One is called Six sigma DMAIC, which stands for define, measure, analyze, improve and control. The other one is Six Sigma DMADV which stands for define, measure, analyze, deign, and verify. Both of these methods try and achieve as little variation as possible.Through the use of these data based methodological process, companies can asses the efficiency and quality of their process, and install measure to constantly be improving and trying to achieve that Six Sigma, which would represent perfection. Many hospitals all across America are using programs such as this already. One of the hospitals that has seen results from the Six Sigma Efforts is St. Joseph Health Center in St.Louis. After implementing these processes, they were able to obtain a decrease in annual turnover as well as an increase in revenue and in emergency room admissions. By examining each part of their departments and really striving for the best, they have been able to radically turn around their hospital.

It is imperative that more hospitals look at constantly improving their system process to minimize the number of error that occur within their facilities. As hospitals, one of the main responsibilities and missions should be to save lives, not to endanger them. Errors such as the overdose of the Quaid twins are preventable and should be foreseen and accounted for. Only then will hospitals truly decrease their liabilities and become the health sanctuaries that we desire them to be.