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Virginia hospitals crying for more Medicaid

By   /   March 19, 2014  /   No Comments

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‘FREE MONEY': Gov. Terry McAuliffe met with Dr. Patrick Neustatter and staff in the Lloyd F. Moss Free Clinic at Mary Washington Hospital in Fredericksburg last week.

By Kenric Ward | Watchdog.org Virginia Bureau

FREDERICKSBURG, Va. — Virginia hospitals are behaving like hypochondriacs jonzing for a stronger Medicaid fix.

While warning of financial doom if the state fails to expand the indigent-care system, hospitals’ revenue and hefty six-figure executive compensation packages point to healthy bottom lines.

The 2013 Virginia Health Information report shows solid operating margins at a majority of hospitals. For example:

  • Augusta Health in Fishersville, 23.28 percent.
  • Martha Jefferson in Charlottesville, 10.57 percent.
  • Rockingham Memorial Hospital in Harrisonburg, 7.69 percent.
  • UVA Medical Center, 7.43 percent.

Augusta has since placed its margin is between 8.5 percent and 13.5 percent. All four facilities are “not for profit.”

A Washington Post editorial Sunday declared that Fredericksburg-based University of Mary Washington Healthcare is in dire straits:

“It lost $30 million over the past two years and, having borrowed heavily to finance an expansion, is burdened by debt. Its $185 million in reserves represents less than half a year’s operating capital.”

Echoing Gov. Terry McAuliffe and fellow Democrats in the General Assembly, the Post prescribed Medicaid expansion as the cure.

“(Expansion) would give the state an enormous economic lift, generate thousands of jobs and provide health-care coverage to at least 250,000 Virginians. In the process, it would sustain hospitals whose financial health depends on unlocking federal funding,” the Post opined.

A local Republican leader mocked the hospitals’ Medicaid campaign as corporate “rent-seeking” from the public purse.

“I really don’t think a system that can afford to lavish bonuses and nearly seven-figure salaries on its senior executives is in any danger of bankruptcy, or of having to cut back drastically on the services they offer,” said Steve Albertson, GOP chairman in neighboring Stafford County, referring to UMW Healthcare.

“The fact is that hospitals, and lots of other large corporations, often carry debt strategically, often manage balance sheets strategically, and can be in excellent financial health even while posting an operating loss,” Albertson, a lawyer, told Watchdog.org.

A tax document obtained by Watchdog revealed that the Virginia Hospital and Healthcare Association paid its president, Laurens Sartoris, $553,082 in 2011. The industry lobbying group’s top three executives earned more than $1 million combined that year, the latest year for which data is available.

Hospitals in Virginia are not required to provide their audited financials to the public.

House Republicans — led by Speaker Bill Howell, R-Falmouth, and state Delegate Steve Landes, R-Verona — see no need for Virginia to rush into Medicaid expansion when Washington continues to delay Obamacare rules.

The president has extended Medicaid reimbursement formulas through October 2015, meaning no reductions in indigent-care funding to hospitals for at least 18 months.

ALL BUSINESS: Nicole Riley, head of the Virginia branch of the National Federation of Independent Business, says her 5,500 member companies have no confidence that Washington will make good on its healthcare promises.

“The whole reason we’re having this discussion is that (Medicaid expansion) is a key part of Obamacare,” said Nicole Riley, president of Virginia’s 5,500-member National Federation of Independent Businesses.

“Our members have no faith that the federal government will make good on its promises,” she said. NFIB wants a top-to-bottom audit of state Medicaid.

“Instead of advocating a massive increase in an entitlement program, it is time for hospitals to re-evaluate their dependence on federal dollars. They should look from within for ways to cut costs,” said Craig DiSesa, director of legislation at the conservative Middle Resolution PAC.

A recent study found that up to 39 percent of health-care spending could be eliminated without harming  consumers or reducing quality of care at hospitals.

Looking to the Medicaid-budget special session that starts Monday in Richmond, Albertson suggested, “It would be nice to see some language that reduces hospital payments by an amount similar to any compensation paid to their executives for lobbying or political activity.”

Kathryn Watson contributed to this report.

Kenric Ward is chief of Watchdog.org’s Virginia Bureau. Contact him at kenric@watchdogvirginia.org or at (571) 319-9824. @Kenricward

 

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Kenric Ward is a veteran journalist who has worked on three Pulitzer Prize-winning newspapers. A California native, he received a BA from UCLA (Political Science/Phi Beta Kappa) and holds an MBA. He reported and edited at the San Jose Mercury News and the Las Vegas Sun before joining Watchdog.org in 2012 as Virginia Bureau Chief.

Watchdog.org Virginia Bureau, is in no way affiliated with "The Virginia Watchdog". Any similarities between Watchdog.org Virginia Bureau and "The Virginia Watchdog" is completely coincidental and unintentional. Any inquiries into "The Virginia Watchdog" may be done through their site.

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