09252017Headline:

Washington, District of Columbia

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Chris Nace
Chris Nace
Attorney • (202) 930-0292

Hospital Fails Medicare Grade while Still Putting Money in Owner’s Pocket; Patients at Risk

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Beleaguered by mounting debt and down-trending stock values, hospital healthcare leader Community Health Systems (CHS) has made some questionable moves that have healthcare professionals and shareholders on opposite sides of the proverbial fence—the problem is that patients are most likely to suffer before it’s all over.

 

Once the largest for-profit hospital chain in the United States, CHS is now facing $15 billion in debt after years of aggressively buying up similar, smaller healthcare providers—notably, the acquisition of Health Management Associates (HMA) in 2014 was an action that quickly increased CHS’s size to 206 hospitals in 29 states but also burdened the company with $3.7 billion in debt.

 

Several years later, the purchase of HMA has not been the boon it was hoped to be—the added facilities have yet to pull their weight and the massive size of the company has many investors shying away from anything but buying bits and pieces of its holdings.

 

CHS is now attempting to appease its debtholders with profits from some of its more lucrative locations—but doctors at the facilities  say it’s at the expense of reinvestment in the operations themselves, causing issues with the quality of care and lagging patient satisfaction. Case in point is one of their flagship, and most profitable, hospitals in Fort Wayne, Indiana. Rated two out of five stars by a Medicare.gov survey, Lutheran Hospital was ranked 104th out of 122 hospitals in Indiana—and even then, 12 hospitals weren’t included in the rankings because sufficient data wasn’t provided.

 

Faced with rapidly declining standards that put profits before patient health, a number of doctors at the hospital formed Fort Wayne Physicians LLC and attempted to bring in a partner that would have purchased a controlling interest in the facility and worked directly with doctors to reverse the current trends and improve quality and care. The CHS Board of Directors rebuffed the offer from the doctors in addition to stating that they were surprised by the move and the report of overall dissatisfaction. A letter from the company’s CEO and COO responded that, “Frankly, we were surprised by some of these concerns. We believed things were going well, based on reports we received from your market and division leadership.”

 

Meanwhile, other actions by the company don’t paint the pleasant picture they describe, as CHS recently announced that they plan to sell off 30 hospitals in Texas, Mississippi, Louisiana, Florida, Ohio and Pennsylvania. Hopefully these healthcare facilities will ultimately benefit from being cut loose from this foundering ship, but in the short term it’s the communities that have to bear the brunt of CHS’s bad decisions.

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  1. William Pond says:
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    The physicians and nurses at Lutheran are invested in the community and have spent decades building a reputation for quality. They live here and are treated here and will live here for decades to come. The same cannot be did for the current corporate owners.

    It is unfotunate that the most recent owner, CHS, diverted resources away from the community to bolster their failing company. The physicians and nurses have for years clearly and explicitly informed CHS of the problems due to inadequate resources, underpaid staff and bloated non responsive management from afar. CHS chose to pursue corporate acquisitions and multimillion executive salaries instead of addressing issues and at the expense of patient care.

    Unfortunately, CHS needs to drain as much money as possible from Northeast Indiana to keep their sinking ship afloat. They cannot sell the Lutheran Network while it is profitable. They will only be inclined to sell when profitability sags, but alas it will be too late–the reputation will have been tarnished, good staff departed and physician referral patterns established to other locations.

    The patients benefit from two strong, competing quality hospitals in the community. It is sad to see the loss of the Lutheran Network due to CHS management.