Looks nice from the outside: Lower Keys Medical Center, owned by hugely indebted Community Health Systems and scene of patient overcharging.
Physicians are blaming the hospital takeover boom, which has been fueled by massive debt, for some leading hospitals to become dirty and dingy. A Bloomberg piece looks at for-profit Community Health System’s (CHS) neglect of an Indiana health system, Lutheran Health Network, and overcharged patients at CHS’s Lower Keys Medical Center, in Key West, Fla., as examples of the tendency to slash quality and raise prices to dig out of the debt hole.
For-profit hospital chains such Community have borrowed billions to buy up rivals and have been facing massive debt repayment challenges just as the revenue benefits of the Affordable Care Act have waned.
Bloomberg noted: “Once the biggest U.S. for-profit hospital chain, Community is selling off other, poorly performing facilities to pay off $2 billion of its $15 billion in debt. Yet even as the company skimps on spending and patient satisfaction lags at key facilities its bonds are rising in value — an indication that debt holders are betting that the chain will make a financial turnaround.”
Still, “If the chain can’t subdue the unrest at its most profitable locations, it’s not clear how successful the turnaround will be. Indiana and Key West represent just nine of Community’s about 150 hospitals, yet they contribute an estimated 16 percent of the company’s adjusted earnings before interest, taxes, depreciation and amortization,” Mizuho Securities analyst Sheryl Skolnick told Bloomberg.
To read the article, please hit this link.
