In the Sunday News May 10 lead article headed “$113 MILLION SURPLUS IS A DECREASE FOR LGH”, the newspaper leans over backwards to paint Lancaster General Hospital as a great benefactor of the city and the community while struggling to minimize the implication of so much public money being directed not necessarily in the public’s interest.
The paper quotes President and CEO Thomas Beeman as saying “Things have changed dramatically in the past year. We’re reflecting the rest of the economy.” For the sake of the national economy and especially the auto industry, would that it were true!
As a series in NewsLanc exposed, LGH has been the second most profitable hospital in the state and has one of the lowest levels of contribution to charity.
As also reported and affirmed by a reliable LGH source, the hospital’s dominant position in the Lancaster market place enables it to negotiate higher fees from insurance companies than is possible elsewhere.
However, when insurance companies have to pay higher costs, they need to charge more for their policies. The companies will make their mark up and thus their profits; but the brunt of the high prices falls upon the policy owners, who are we Lancastrians. So we aren’t talking about LGH’s money; it’s a non-profit institution. We are talking about our money: the public’s money!
Here is some sycophantic misdirection from the article:
“Lancaster Mayor Rick Gray lauded Beeman and LGH. ‘When I talk to other mayors and tell them how much they contribute, their jaws drop.’” If Gray tells them how much LGH is making due to its dominant health care position, the other mayors would probably keel over!
“More than $25 million of the surplus will go to replacing and upgrading equipment.” When equipment is replaced and upgraded, the costs are depreciated over several years and are deductions from profits. The $113 million this year is after, not before, the costs of “replacing and upgrading equipment” over the past years. In future years, LGH will charge off this year’s outlays.
“LGH spent more than $50 million last year on care for low-income and uninsured patients.” That would have been expensed, so the $113 million is after allowing for such services.
“The hospital spent more than $1 million last year on wellness programs targeting, among other things, obesity and smoking.” Commendable, but also treated as an expense; so not out of the $113 million profit.
“The hospital offers financial assistance on a sliding scale.” Again, that is expensed, so the $113 million profit is after providing such services which are typical of all hospitals.
The Sunday News goes on: “Beeman said that pharmaceuticals represent one-third of LGH’s costs and cited unnecessary emergency room visits as an ‘inefficient’ way to seek care.” Absolutely! But those inefficiencies are treated as cost and do not come out of the $113 million profit.
Also reported “The hospital distributed nearly $1.9 million in grants last year, of which more than $100,000 went to United Way of Lancaster County.” Isn’t part of that allowed as an expense?
Alex Henderson III, vice chair, is quoted as saying “All the money we make goes back into the community.” True enough, but the issue is how much is bloated compensations, pensions, perquisites, and spending on plant and equipment which should not have the highest priority?
For example, Rick Kastner, Executive Director of the Lancaster County Drug and Alcohol Commission, reports that less than 500 of the 5000 to 10,000 heroin addicts in the county are able to afford or, even if they have the money, obtain treatment. Would the community not be better off if LGH only made $110 million but another thousand addicts received health care and were able to become constructive and law abiding members of their families and of the community?
This article is not meant to be a put down of the good people of General Hospital who provide commendable expertise and services. Rather, NewsLanc believes that LGH is the one institution that best reflects the needs of the community and has the potential for relatively selfless leadership in the future. The other four local titans – Franklin & Marshall College, Fulton Bank, High Industries and the Lancaster Newspapers- are duty bound to stockholders or trustees to best represent their special interests. And they certainly are so motivated!
NewsLanc does believe that LGH has a responsibility to utilize its earnings for the best overall interests of the community from which its disproportionate profits spring. It could well afford to donate $25 million to $50 million of the $113 million towards public health and education. Furthermore, over time, the gifts would actually earn profits as a result of a healthier and more prosperous community that would be better able to pay its bills without subsidies and charity.
It’s time for Rick Gray, United Way President Susan Eckert, and the Lancaster Newspapers to stop blowing kisses to LGH (to put it politely) for the crumbs LGH allows to fall from the table and call upon the health care system to do far more for the good of the public, which not only is the source of its revenue, but owns the place!