By and large, the Sunday News front page article “Billion-dollar baby” about Lancaster General Health was very gratifying. It included much of the same information that NewsLanc has been reporting over the past couple of years. It also included attempts by LGH’s executives to put the best spin they could on information that suggests that LGH is more interested in rewarding its executives and personnel and irrational growth than fulfilling its responsibilities as a Public Charity to the community.
We encourage that careful reading of Gil Smart’s report. Until LGH makes public its past due 2008 / 2009 federal return, we will not be able to make a definitive evaluation of LGH’s representations. However, there are a few that minimally require further explanation and likely condemnation:
“Just two years ago, Lancaster General Hospital recorded record profits of $138 million. Last year’s profit of $78.8 million represented a 42 percent fall from that summit.” Maybe yes, maybe no. According to a recent Intelligencer Journal New Era article, LGH added over ten million to its employee pension fund to make up for losses due to the stock market plunge. If those tens of million (the exact amount was not specified) are added to the $78 million in profit, LGH may have only suffered only a 10% rather than a 30% drop from the 2007 /2008 fiscal year’s earnings. This while most ‘for profit’ firms were struggling to even remain profitable!
“’We have taken a disproportionate amount of responsibility for the medically underserved in this community,” said LGH Executive Vice President Jan Bergen. Medical assistance patients account for 15 percent of patient days, but just 4 percent of revenues. ‘We get paid substantially less than cost,’ said Bergen” . This is disingenuous. All hospitals absorb some of the costs of Medicaid, but LGH’share is among the lowest as a percentage of gross revenue throughout the state. The paucity of such aid contributes to LGH’s extraordinary profit margin, more than double the state wide average. Furthermore, those expenses are before, not after, the $78 million in profits.
“The system employs 3,906 full-time workers and 3,215 part-time workers, said hospital spokesman John Lines. And one reason Lancaster General Hospital’s profit fell last year is that expenditures on salaries, other compensation and employee benefits soared 23 percent, to $385 million.” Wow! No wonder profits were down when this so called Public Charity is providing a 23% increase in a single year in “expenditures on salaries, other compensation and employee benefits….” Talk about excesses on Wall Street!
And for sheer silliness, the article ends with a quote from Beeman as follows: “”It’s as if [hospitals] are at the head of the Colorado River,” Beeman said. “We’re all in rafts, some of us have oars and some of us don’t. Some of us just aren’t going to make it.” With his $1.3 annual compensation, he sure is!
Beeman will make it. He will fly over the Colorado River in a private jet. $1.3 million a year provides a lot of security. What in the world does he do to earn $1.3 million a year????
Just to clarify the LGH profits made last year.
The non-executives do not get to see any of that profit. Most regular employees have only earned about a 25 cent increase in pay, in the last several years. The organization has not filled any positions that people have left to go else where. Many departments are struggling to perform patient care in a safe and efficient mannor.
They even had several changes to the pension plan that will effect numerous individuals.
Most of those profits will benefit the ever increasing executive section that runs LGH.