“For Sale,” Lisbokt

July 23, 2018; US News & World Report and NPR, “Shots”

As NPQ has reported, US hospitals are under increasing financial pressure as the combination of increased costs and changes in reimbursement practices from both governments and insurance companies squeeze net revenues. There are nonprofit hospitals which have surrendered their 501c3 status in favor of being entities of local government (look here and here for examples), and there are county hospitals that have elected to establish 501c3 nonprofit corporations to operate their hospitals.

Mission Health, the largest hospital system in Western North Carolina, is exploring being acquired by HCA Healthcare, the nation’s largest for-profit hospital chain. This is a stressful decision for the hospital and the community, given Mission Health’s 130-year history as a nonprofit. Some are concerned about the future of Mission Health’s commitment to charity care, valued at $100 million last year, when the system is controlled by a national for-profit corporation.

Susan ReMine, 68, says that Mission Health saved her life. Not only did they assist her when she suffered kidney failure, but when she lost her job, a Mission Health-assisted program provided free care. Mission Health also “screens residents for food insecurity, provide free dental care to children in rural areas, help the homeless find permanent housing, and encourages 12,000 employees to volunteer at schools, churches, and nonprofit groups.”

Ron Paulus, Mission Health’s president and CEO, stated the reason for the merger is “[they] wanted to thrive not just survive. In the past four years, Mission Health had to cut costs to preserve “an acceptable operating margin.” The expected gap between revenue and expenses in 2019 and 2020 is $150 million.

As part of the proposed acquisition, HCA will establish a charitable foundation. Paulus says, “The foundation created from Mission Health could generate $50 million or more a year to—among other initiatives—‘test new care models such as home-based care …and address the causes of poor health in the community in the first place.’”

Local businesses, like the Ingles Market supermarket chain based in Asheville, have some concerns about the merger. Chief Financial Officer, Ron Freeman states, “We understand the business reasons [for the deal], but our overwhelming concern is the price of health care.” There is evidence that hospital charges increase after a nonprofit hospital becomes a for-profit entity, but Paulus doesn’t believe that will happen with Mission Health.

Having a money-losing nonprofit hospital is a healthcare risk in any community. Will the risk to the community be reduced, increased, or changed if Mission Health becomes part of HCA? Much depends on HCA’s respect for Mission Health’s historical role and the community’s ability to advocate for quality healthcare and services.—Diandria Barber and Michael Wyland