03.22.2007
New
Financial Report Shows Hospitals Posted Record Profits in
2006
Topping
$1 Billion for the First Time – Nearly Doubling Since 2004
During the Same Time Period, Studies Show There
Has Been No Improvement in RN Staffing Levels, Causing Patients
to Suffer While Hospitals’ Coffers Grow
View
Financials
CANTON,
Mass.—At a time when patient safety is being
endangered by RN understaffing, the state's hospitals have
once again posted record profits totaling an astonishing $1
billion for the past fiscal year - a 10 percent increase over
the previous year, and a 94 percent increase in profits since
2004.
The
numbers are particularly striking given the fact that almost
all the major hospitals in the Commonwealth are non-profit
institutions. According to the numbers posted this week by
the Massachusetts Department of Health Care Finance and Policy
(www.mass.gov/dhcfp),
total hospital profits for 2006 were $1,010,578,000, compared
to $916,661,000 in 2005, and $519,857,000 in 2005. Of the
hospitals reporting, only nine reported losses during 2006,
compared to 14 in 2005.
"Massachusetts
hospitals definitely put the 'profit' in 'non-profit,'" said
Donna Kelly-Williams, RN, vice president of the Massachusetts
Nurses Association, one of 104 leading health care and consumer
organizations supporting legislation to set safe RN staffing
limits. "This year's profits could pay for the staffing needed
to protect patients many times over, yet the safety of patients
is being sacrificed to high industry profits and seven-figure
CEO salaries."
The
bill, The Patient Safety Act (H. 2059) would dramatically
improve care by setting a safe limit on the number of patients
assigned to a nurse. The measure, which is co-sponsored by
State Rep. Christine Canavan (D-Brockton) and Senator Marc
Pacheco (D-Taunton), calls upon the Department of Public Health
to set a safe limit on the number of patients a nurse is assigned
at one time. In addition, the bill calls for staffing ratios
to be adjusted based on patient needs. It also bans mandatory
overtime, and includes initiatives to increase nursing faculty
and nurse recruitment. During the last legislative session,
the Massachusetts House of Representatives passed a similar
bill by a vote of 133-20.
Not
surprisingly, the biggest profit margins were recorded by
the state's major teaching hospitals. Massachusetts General
Hospital, which recently made front-page news for its near
failure of an unannounced safety survey by the Joint Commission,
posted a whopping $294 million profit in 2006; Children's
Hospital ranked second with $101 million; and Brigham &
Women's Hospital came in third with a $69 million profit.
UMass Memorial Medical Center in Worcester scored more than
$45 million in profits and Baystate Medical Center in Springfield
topped $44 million.
In
perhaps a more dramatic turnaround, all but one of the 24
hospitals in the Mass Council of Community Hospitals reported
profits - rebutting the community hospitals' claims that they
could not afford to comply with the Patient Safety Act. For
example, Falmouth Hospital's profits jumped from $3.3 million
to $8.1 million; Berkshire Medical Center more than doubled
its surplus from $11.4 million in 2005 to $24.4 million in
2006. A number of other hospitals also multiplied their surpluses:
Holyoke Hospital
almost
quadrupled its profits; Hallmark Health Systems (Lawrence
Memorial and Melrose-Wakefield hospitals) jumped from $2.5
million to $7 million); and even small Fairview Hospital in
Great Barrington went from a slim profit in 2005 to $2 million
this past year.
The
$1 billion profit margin comes at a time when the new health
reform law, which was passed by the legislature last year,
could yield the industry another $300 million. At the same
time, the industry has been in the midst of a massive building
boom, with expansion projects completed or in the works totaling
more than $500 million. Hospital CEOs have also reaped significant
benefits, with most earning high six-figure, and a number
receiving seven-figure salaries.
While
Profits and CEO Salaries Grow
Hospitals Refuse to Invest in Safer Nursing Care
While
the hospital industry has been making enormous profits and
spending lavishly on new projects, the quality of patient
care in Massachusetts hospitals has been deteriorating because
registered nurses are being forced to care for too many patients
at once. Instead of investing in better staffing to protect
patients, the industry has responded by spending hundreds
of thousands of dollars to defeat the Patient Safety Act.
Between
2004 and 2006, when the industry's profits doubled, a study
of actual RN staffing levels in the state's hospitals conducted
by the Massachusetts Nurses Association and Andover Economic
Evaluation found:
- There
was no statistically significant difference in hospital
staffing levels between 2004 and 2006.
- More
than half of the hospitals reported regularly assigning
more than five patients per nurse and every hospital reported
an assignment of more than four patients per nurse on
the medical/surgical floor. A study in the Journal of
the American Medical Association finds that for each patient
over four assigned to an RN there is a 7 percent increase
in risk of injury, harm and death to patients.
- In
a shocking 36 percent of observations hospitals failed
to meet the accepted minimum standard of no more than
two patients per nurse in the intensive care unit, a standard
recommended by the Institute of Medicine.
- Most
alarming of all, more than 45 percent of hospitals had,
on occasion, assigned eight patients or more to their
nurses, a staffing level that according to research published
in the Journal of the American Medical Association, placed
those patients at a 31 percent increased risk of death.
During this time period, surveys of past patients and physicians
conducted by Opinion Dynamics Corp., a leading Cambridge-based
research firm, found a dramatic deterioration in the safety
and quality of patient care in our state's hospitals. A 2005
survey of past patients in Massachusetts' hospitals found
that one in four patients (an estimated 235,000 patients a
year) reported their safety was compromised during their hospital
stay due to their nurse having to care for too many other
patients. A 2005 survey of Massachusetts' physicians found
82 percent of doctors agree that the quality of care in Massachusetts
hospitals is suffering due to the understaffing of RNs.
Kelly-Williams
says now is clearly the time to act. "These profits show that
the resources are available to hospital administrators to
improve RN staffing levels to comply with the Patient Safety
Act so that nurses can provide the safe, quality care our
patients deserve."
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