by Andrew Walden

Here is an interesting article from the Wall Street Journal, August 29: Cash-Poor Governments Ditching Public Hospitals.  According to the Journal, 

Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort….

More than a fifth of the nation's 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times. Because most public hospitals tend to be solo operations, they don't enjoy the economies of scale, or more generous insurance contracts, which bolster revenue at many larger nonprofit and for-profit systems.

The Hawaii Health Systems Corporation operates 14 rural hospitals and long-term care facilities which employ about 4,200 HGEA and UPW members.  Many of the hospitals serving less populated areas lack basic medical equipment found in African hospitals.  The Legislature has demanded for years that the HHSC become self-sufficient, refusing to grant it more funds.  At the same time, Hawaii’s Democrat-controlled legislature has refused to enact tort reforms which would reduce hospitals’ (and doctors’) insurance costs.  Now, thanks to Obamacare, HHSC will face even greater pressures.  The Wall Street Journal continues:      

Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March.

Moody's Investors Service said in April that many standalone hospitals won't have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market cannot borrow money, either. Meantime, the federal government is expected to cut aid to hospitals….

Last December, the Legislatively-mandated Stroud report outlined HHSC’s dire financial conditions of proposed to dissolve the HHSC and allow the takeover of individual hospitals or groups of hospitals by non-profit foundations.  But what HGEA/UPW-owned Democrat legislator would vote for a bill which would cost the HGEA and UPW union bosses control over that many employees? 

Thanks to Obamacare, the pressures on HHSC are about to become much greater.  The Wall Street Journal sums up:         

Health-care consultants and financial analysts say the pace of all hospital sales is picking up at a rate not seen since the 1990s, the dawn of managed care. James Burgdorfer, a partner with investment banker Juniper Advisory LLC in Chicago, said most public systems would end in the next two decades because the industry has become too complex for local politicians.  "By the nature of their small size, their independence and their political entanglements, they are poorly equipped to survive,'' Mr. Burgdorfer said….

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WSJ: Cash-Poor Governments Ditching Public Hospitals 

REALITY: Hawaii Hospitals: Not Quite Catching Up To Africa, Legislative Report: Convert HHSC to non-profit, dump civil service (full text)

PROPAGANDA: Seniors and hospitals win big in reform bill (Star-Bulletin headline Dec. 25, 2009)

HHSC: http://www.hhsc.org/