Tuesday, December 02, 2008
Editorial: Carilion's unseemly profits
Last year, the nonprofit clinic's flagship hospital had a profit margin of more than 11 percent, by one measure, but ranked low in charity care.
From the RoundTable blog
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The nonprofit Carilion Roanoke Memorial Hospital had one of the highest profit margins of any hospital in the region in 2007 and devoted a lower percentage of its expenditures to charity care than most. It needs to improve that picture.
With businesses strained by an economy in evident recession, more and more workers will be feeling the pain of lost wages and benefits. As jobs disappear, so too will employer-based health insurance for those workers who have been lucky enough to have it.
The newly uninsured and underinsured -- people who are not penniless, but can ill afford hospital bills of hundreds, much less tens of thousands, of dollars -- should have access to necessary care without facing certain financial ruin.
That some do not was evident earlier this year, when staff writer Laurence Hammack reported stories of low-income people the hospital has sued for nonpayment. Carilion at the time accounted for 40 percent of the total judgments since 2003 in Roanoke General District Court.
Carilion Clinic does have policies to provide free and discounted health care to the poor. Unfortunately, many people likely to qualify either don't know what help is available or how to make sure they get it. Now more than ever, the programs will need to be more easily accessible.
Granted, statistics can be misleading, and Roanoke Memorial Hospital's standing in the charity ranking suffers in the way the latest data were analyzed.
Virginia Health Information statistics, released last week, looked at charity care as a percentage of hospitals' expenses. The hospital would prefer to calculate its charitable services as a percentage of revenues.
The hospital spends more per patient than its Roanoke Valley competitor, Lewis-Gale Medical Center. As spending goes up, the percentage for charity care gets lower even though the dollars spent stay the same.
However it is calculated, Carilion does offer a lot of charity care -- the most in total dollars of any hospital in the region. But then, it is by far the largest health care provider in the region. It also has to write off a lot of bad debt -- yet much of it might not have been billed from the start with better communication at the point of initial contact with low-income patients.
Carilion spokesman Eric Earnhart disputed Carilion's reported profit margin, which he said included investment income -- paper gains that are dependent on the vagaries of the market. Margin on actual operations was closer to 1 percent, he said.
The clinic cannot be expected to fix a health care delivery system that is broken nationwide. Still, Carilion's dominant presence and its nonprofit, tax-exempt status give it a special responsibility to the community, especially to help it through hard times.
