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Covering hospitals: An introduction

June 11, 2012

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Hospitals are often among a community's largest employers and are great places for stories.

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The local hospital often remains a mystery to reporters. Few reporters scrutinize its finances. If the job falls to anyone, it goes not to a specialist but to reporters covering business, politics or features. And don’t expect the PR folks to make it easy.

Yet a hospital’s finances can be grist for great stories. Hospitals are often among a community’s largest employers. Indeed, many hospitals are far larger than local governments – in spending and in employees –  yet receive far less media attention.

Ever notice how hospitals always seem to growing? Many have proven remarkably resistant to the latest recession. And they’re beehives of interesting decisions. Hospitals regularly grant large contracts, buy expensive equipment, sell bonds, build huge buildings, pay lavish salaries, employ lobbyists and manage vast stock and bond portfolios. The value of their investments alone can reach into the billions.

Much of a hospital’s success is driven by money. With strong finances, hospitals can attract good doctors, buy the latest equipment, offer more services and refurbish their buildings. And likewise, a poor balance sheet can limit their offerings and, some experts say, result in inferior care.

Let’s begin with …This package of posts gives you a brief guide to the behemoth.


1)      Overall hospital performance. People will want to know if their hospital is dying or flourishing. Or is it somewhere in the middle? A new building or emergency room is a good opportunity to evaluate a hospital’s performance.  Hospitals are often adding and cutting services to improve their finances. They face lots of new competition from surgery centers to minute clinics. They’re also likely to be clobbered by any deal to cut the federal deficit.

Eye examination
An ophthalmologist checks the eyes of a patient. Photo: USP Hospitales, Madrid.

2)      Salaries. The IRS Form 990 has lots of new information on salaries and benefits for top executives. Compare salaries to those in similar institutions and see if the performance is consistent with any pay increases. The 990s does a better job listing board members whose firms get work from the hospital.  Some doctors may also get a housing stipend and very generous salaries.

3)      Is your nonprofit hospital “earning” its tax-free status? The latest 990 enables you to compare your hospital’s community benefit spending to others. (Reporters used to have to do it on their own) Check on how the uninsured are being treated. Are their numbers rising? Are they paying more for care?  Are people being improperly dunned by the hospital and forced into bankruptcy?

4)      Fraud. Hospitals are often the target of government fraud investigations and accused of over-billing.  For-profits in particular (Tenet, HCA) have been accused of over-billing in the past. These probes may be acknowledged in various documents that hospitals file.

People, field visits, documents

The best hospital sources tend to be academic experts at business schools and schools of health policy or public health. These folks can help you evaluate key documents and develop a list of questions for administrators.

Other helpful sources include bond analysts, state regulators, former hospital administrators, board members (past and present), union leaders and medical staff presidents.  Health care consultants may be helpful too but bear in mind that they earn a living by working for hospitals.


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