Public will weigh in on hospital future

First first time in history, hospital may be profit-driven
By Vicki Hyatt | Nov 01, 2013

Haywood County’s first hospital started out in 1926 with a successful bond referendum and a $10,000 Duke Endowment.

A proposal pending before the Haywood Regional Medical Center Board of Commissioners will bring the hospital back to it’s Duke roots.

At a public hearing to be held at 6 p.m. Nov. 12 in the hospital’s health and fitness center, the public will be able to comment on a proposal to sell the hospital's facilities and holdings. The details involving a proposed sale to Duke LifePoint Healthcare, a joint venture of LifePoint Hospitals and Duke University Health System will be made public at 9 a.m. today.

The system is a private, for-profit organization as opposed to the public hospital system initially established in Haywood. The governing format was changed to a hospital authority in 1997 and operated as a public, nonprofit hospital.

In addition to the differing tax status of the two, Don Dalton, vice president of public relations with the N.C. Hospital Association said the basic difference between a nonprofit and a for-profit hospital involves how revenues in excess of expenses are handled.

“On the for-profit side, a company is owned by its shareholders — people who have bought stock in that company,” Dalton said. “Some of the profits are returned to those shareholders.”

In a not-for-profit operating model, any revenues in excess of expenses go back into the operation.

The association has hospital members from both operating models, as well as facilities owner and operated by government entities such as a city or county, thought for-profits only constitute only a small percentage of the membership.

Out of the about 150 hospitals in the state, 131 belong to the N.C. Hospital Association, and roughly 110 are acute care facilities, Dalton said. Of those, between 10 and 12 percent are for-profits.

“Our data indicates that the strengths of a hospital depend on the community in which it exists. Among our membership, whether for-profit or not-for-profit, the financial health is driven by the demographics within the community,” Dalton said.

While all hospitals are required by law to treat patients that show up in the emergency room, oftentimes, patients without insurance or the ability to pay for service become charity cases. Dalton said the association had no statistics available to compare the level of charity care offered in the three operating models.

“Communities in which the hospital serves a higher percentage of Medicare, Medicaid and uninsured patients fare worse financially than hospitals where there are higher percentages of commercially insured patients,” Dalton said. “Each community hospital is a very unique thing and each hospital is built and maintained specifically to serve the health needs of that unique community.”

A recent Congressional Budget Office (CBO) study found that:

• on average, nonprofit hospitals provided higher levels of uncompensated care than did otherwise similar for-profit hospitals.

• nonprofit hospitals were more likely than otherwise similar for-profit hospitals to provide certain specialized services but were found to provide care to fewer Medicaid-covered patients as a share of their total patient population.

• nonprofit hospitals were found to operate in areas with higher average incomes, lower poverty rates, and lower rates of un-insurance than for-profit hospitals.