Health system transparency: Lawmakers need more facts about hospital finances

This story was published in the Winter 2021 issue of The Washington Nurse magazine.

Wa nurse transparency

The COVID-19 pandemic has put a spotlight on the inner workings of hospi­tals across the country. Last spring, reports revealed that at the same time some hospi­tals and nonprofit health systems were laying off essen­tial workers, they continued building hedge funds in the billions. As the pandemic persists, it is becoming apparent that legis­la­tors and their commu­ni­ties deserve more insight into how our state’s hospi­tals are being run.

Hospital profit grew in 2020 #

Although many people are aware that health care spending has soared over the last several decades, few Ameri­cans know about the expanding role of private equity in the health care system. Despite the economic turmoil facing our commu­ni­ties during the COVID-19, pandemic many hospi­tals are not just maintaining profit but actually growing it. According to a 2020 Pitch­Book Report, U.S. private equity deals in the health care sector totaled $8.5 billion between April 2020 and July 2020. This is especially trouble­some consid­ering that during that same period, hospi­tals across the country were citing revenue short­falls,” insti­tuting large layoffs and refusing to pay front­line workers hazard pay.

In May, The New York Times reported that Provi­dence Health System, the country’s largest and richest hospital chain (as well as the owner of 35 hospi­tals in Washington state), is holding $12 billion in cash. In a typical year, this health system gener­ates $1 billion in profits — which they invest in Wall Street hedge funds. Provi­dence also received $509 million in govern­ment assis­tance funds from the federal CARES Act intended to support hospi­tals during the COVID-19 pandemic.

But not all hospi­tals are the same. Although Provi­dence may be operating in the billions, we know that smaller hospi­tals in our state are in desperate need of finan­cial support from the govern­ment. It is crucial that the Washington State Legis­la­ture require more finan­cial trans­parency from our hospi­tals. Nurses, patients, commu­ni­ties and legis­la­tors deserve the facts.

2021 Legislative Session #

Last year, Repre­sen­ta­tive Nicole Macri (43rd LD) intro­duced House Bill 2036: Concerning Health System Trans­parency. The bill passed out of the House, but never made it to the Senate floor.

This year, Rep. Macri plans to intro­duce similar legis­la­tion; only now, the bill will also address the rising concerns about hospital profit during the COVID-19 pandemic (it will also have a new bill number). This year’s bill will:

  • Require hospi­tals to provide more detailed reporting on their operating finances.
  • Require hospi­tals to provide more infor­ma­tion on the impact of commu­nity benefit dollars on the commu­ni­ties they serve.
  • Require health systems to provide the State with more infor­ma­tion on the trans­ac­tions taking place between facil­i­ties during acqui­si­tions and mergers.
  • Require hospi­tals to report demographic data of the commu­ni­ties they serve. Commu­ni­ties of color have suffered from signif­i­cant dispar­i­ties in our health care system; this problem is only worsening and becoming more urgent during the pandemic.

How can you help? #

The Washington State Legislature’s 2021 Regular Session will look a lot of different from previous years. Most legisla­tive work is expected to be conducted remotely. This provides an unprece­dented oppor­tu­nity for nurses who wouldn’t normally have the time to drive to Olympia to weigh in on legis­la­tion to do so from the comfort of their homes. Throughout session, the WSNA Legisla­tive and Health Policy Council will be looking for nurses to share their stories and experi­ences with legis­la­tors as it relates to their own hospital’s finances.

CHI Franciscan and Virginia Mason merger #

In July, CHI Franciscan and Virginia Mason Health Systems announced plans to form a joint operating company. The expanded company would include 12 hospi­tals and more than 250 treat­ment sites in the Puget Sound and Yakima regions.

This announce­ment comes eight years after Swedish Medical Center and Provi­dence Health & Services merged. That merger led to a decline in services across the state for repro­duc­tive health care, LGBTQ services and end-of-life care. In the United States, one in six hospital beds are in Catholic facil­i­ties. The rate is even higher in Washington state, where 41% of hospital beds are part of religious-based hospital systems. If the merger goes through, a total of four cities in the state — Bellingham, Centralia, Walla Walla and Yakima — will have only a Catholic hospital.

In antic­i­pa­tion of a continued decline in crucial health services under the merger, more than 50 state legis­la­tors wrote and signed a letter to Virginia Mason’s CEO and Board of Direc­tors. These legis­la­tors urged Virginia Mason to continue to provide the full range of repro­duc­tive and end-of-life care services under the new merger.

On Oct. 7, nearly a dozen WSNA members at Virginia Mason met with the chair and vice chair of the House Health Care Committee, Rep. Eileen Cody (34th LD) and Rep. Nicole Macri (43rd LD), as well as with Senate Health & Long Term Care Committee member Sen. Manka Dhingra (45th LD). WSNA members passion­ately shared their concerns about the merger.

In late October, Yakima Valley Memorial Hospital’s Board of Direc­tors voted to end the hospital’s affil­i­a­tion with Virginia Mason. Yakima Memorial’s board cited concerns about the upcoming CHI-Francis­can/Vir­ginia Mason merger as the reason for withdrawing affil­i­a­tion from Virginia Mason. After news of the merger, Yakima commu­nity members and providers from across the region shared concerns with the board about the poten­tial impact on local care. The removal of affil­i­a­tion is likely to take place by February.

As our state continues to see more mergers and acqui­si­tions, WSNA will continue to hold hospi­tals account­able for their finan­cial data and to provide the full range of quality care to their communities.

WSNA’s priorities for the 2021 Legislative Session

WSNA is working to improve enforcement of the Nurse Staffing Law

Our experiences over the past two years have illustrated deficiencies in enforcement of the Nurse Staffing Law, and WSNA has filed 22 complaints with the DOH. We couldn’t have done it without the Assignment Despite Objection (ADO) forms our members filed to call out problems in their facilities.

Your voice is more essential than ever

The legislative session may look different this year, but one thing will remain the same: Your voice is essential to the process! Nurses are the most trusted profession, and your voice carries much credibility and weight with lawmakers.