Ohio Hospital Association Cannot Justify Medicaid Expansion
According to the Ohio Hospital Association, the state legislature’s refusal to expand Medicaid would mean “endangering access to vital health care for their constituents.” President Obama’s Patient Protection and Affordable Care Act (PPACA) phases out subsidies for charity care, but a review of IRS filings reveals that most of Ohio’s largest nonprofit hospitals would have netted millions in revenue even without charity care offsets.
PPACA was written to make lobbying for Medicaid expansion the rational choice for care providers – and the politically expedient choice for politicians looking to capitalize on “free” federal funding. By design, PPACA will push millions of Americans into Medicaid by paying states to raise the program’s eligibility cap and ending Disproportionate Share Hospital (DSH) funding for charity care.
The Ohio Hospital Association has warned that “current federal law reduces Medicare and Medicaid payment for care provided in Ohios hospitals by more than $7.4 billion from 2013 through 2022.” What the hospital lobbying group does not mention in its call for taxpayers to shovel more money into an ineffective entitlement program is that Washington is already more than $16.5 trillion in debt.
Hospitals will pass their costs on to taxpayers and other patients regardless of whether losses are incurred on charity care or on Medicaid, but the PPACA Medicaid expansion represents a simple way for hospitals to take in billions in new public funds while further obscuring the true cost of healthcare.
Though Governor John Kasich suggested in his recent State of the State address that the Ohio General Assembly’s only options are to expand Medicaid or leave Ohio’s poor “out in the street,” charity care and offsetting revenue data from a dozen of Ohio’s largest hospitals show that most would have recorded positive net income in 2011 even without DSH funding.
Replacing DSH with Medicaid expansion would simply mean promising more money the federal government does not have, to be covered by deficit spending and eventually by severe tax hikes.
In 2011, the twelve following nonprofits reported a sum of $384 million in net income and just $30 million in offsetting funds for charity care provided at cost.
Lima Memorial Hospital in Allen County reported net income of $3.9 million. Lima Memorial received $1.5 million in DSH and other funding to offset $6.5 million in charity care provided during the year, while CEO Michael Swick was paid $341,929.
St. Rita’s Medical Center, also in Allen County, reported $22.1 million in revenue after expenses. St. Rita’s provided $16.4 million in charity care and received $3.7 million in DSH and other offsetting funds as a result.
St. Rita’s Health Partners CEO James Reber was paid $791,071, and medical center CEO Robert Baxter was paid $340,114. The organization’s Chief Operating Officer and Chief Financial Officer were both paid more than $350,000.
The Cleveland Clinic reported $245.6 million in net income on nearly $6.4 billion in total revenue. The organization provided $146.1 million in charity care, for which it received just $450,000 in direct offsetting revenue.
Cleveland Clinic CEO Delos Cosgrove was paid $2.4 million, and Chief of Staff Joseph Hahn was paid $1.1 million. International Operations chair Andrew Fishleder was paid $3.3 million, while Cleveland Clinic Abu Dhabi CEO Marc Harrison was paid $1.3 million
Several other Cleveland Clinic officers and department heads were paid well over $1 million in 2011.
Miami Valley Hospital in Montgomery County reported $53.6 million in net income from $838.8 million in revenue, receiving $12.9 million in offsetting revenue for $48.4 million in charity care. CEO Bobbie Gerhart was paid $641,791, and Vice President & Chief Legal Officer Dale Creech Jr. was paid $525,911.
Akron General Medical Center in Summit County reported $17.8 million in net income, with slightly greater than $500 million in total revenue. Akron General received no direct offsetting revenue for $13.4 million in charity care provided during the calendar year.
Akron General CEO Vincent McCorkle received base compensation of $791,084.
Ashtabula County Medical Center reported $198,505 in net income on $92.1 million in total revenue, with no offsetting revenue for $709,774 in charity care. The organization’s four highest-paid employees received a combined $2.2 million in base compensation.
Adena Health System, with facilities in several south-central Ohio counties, reported a net loss of $2.3 million on $377.8 million in total revenue. Adena Health System provided $20.4 million in charity care and received $4.8 million in direct offsetting revenue.
Adena CEO Mark Shuter was paid $662,349, and CFO Keith Coleman was paid $303,600. Orthopedic surgeon Brian Cohen was paid more than $2.5 million, and dermatologist Thomas Lewis was paid nearly $1 million.
Mercy Hospital Fairfield in Butler County reported $29.4 million in net income, with $1.3 million in offsetting revenue for $8.8 million in charity care. CEO Thomas Urban was paid $496,304.
Mercy Regional Medical Center in Lorain County reported $2.1 million in revenue after expenses, with no offsetting revenue for $7.9 million in charity care. CEO Steven Mickus was paid $835,062.
Upper Valley Medical Center in Miami County reported $6.3 million in revenue after expenses. The nonprofit received $1.9 million to offset a total of $8.8 million in charity care, while CEO Thomas Parker was paid $362,894.
Alliance Community Hospital in Stark County reported a $3.4 million loss on $94.3 million in revenue, after receiving $446,451 in offsetting revenue for $2.9 million in charity care.
CEO Stan Jonas was paid $372,745.
Atrium Medical Center in Warren County reported $8.8 million in revenue after expenses, receiving $3 million in offsetting revenue for nearly $16.1 million in charity care. CEO Carol Turner was paid $416,891, and former CEO Douglas McNeill was paid $1.1 million.
Central Ohio’s largest hospital networks, OhioHealth and Mount Carmel, reported $288 million and $10 million in net income, respectively, from July 1, 2010 to June 30, 2011. OhioHealth received $24.5 million in direct offsetting revenue for $89.1 million in charity care during fiscal 2010, while Mount Carmel received $10 million in offsetting revenue for $24.8 million in charity care.
The hospital lobby’s warnings of widespread economic ruin for healthcare providers if the state does not expand Medicaid are not supported by recent financial data. But, by adopting the Ohio Hospital Association’s talking points, the Kasich administration seems intent on pressuring the Ohio General Assembly into addressing local problems with a massive expansion of the national entitlement state.
Even for hospitals that would see short-term financial benefits from the PPACA Medicaid expansion, neither Governor Kasich nor President Obama can suspend reality. Asserting that health care should be free does not make health care free – as the 28 percent of Ohio doctors who refused to accept Medicaid patients in 2011 because of the entitlement program’s sharp underpayment could attest.