News & Events

Fact Sheet on The Hospital Profit Transparency and Fairness Act Ballot Initiative

02.13.2014

Ballot Initiative and House Bill 3844

The Hospital Profit Transparency and Fairness Act (HPTFA)

It’s About Access to Safe Patient Care…It’s About Our Taxpayer Dollars…It’s About Transparency

Late last year, more than 100,000 signatures were gathered from Massachusetts voters, and the Secretary of State for the Commonwealth validated the signatures needed to move this initiative one step closer to being placed on the November ballot in 2014.  Below is information on the initiative and additional information about the HPTFA can be found here.

 

Fact Sheet

The Issues with the current system:

     Massachusetts health care costs are among the highest in the world.

     Our taxpayer dollars are subsidizing the lion’s share of every hospital’s operating budget.

     Meanwhile, hospital CEO compensation packages continue to increase.

     In fact, many hospital CEO’s in Massachusetts are now earning more than $2 million dollars annually in salary alone (and hundreds of thousands if not millions more in unreported additional compensation).

     At the same time, the lowest paid full-time hospital employee is earning roughly $16,000 annually – barely enough to survive.

     Health care is following the corporate ‘bigger is better’ business model emulating Wall Street firms driven by profit, not patient safety.

     The disparity between hospitals continues to grow, creating a system of “haves and have nots,” resulting in the loss of essential services for some communities, particularly those serving the poor and the most vulnerable.

     Consequently, our hospitals today are driven by profit, not patient safety.

     The result -- access to essential and basic health care services as well as patient safety has declined across the Commonwealth.

     The bottom line -- there is a lack of transparency for the full spectrum of hospital system investments and financial holdings, including the size and scope of funds stashed in offshore accounts.

What the proposed ballot initiative would do:

     Require any hospital receiving taxpayer dollars to disclose all financial assets, including those held in offshore accounts.

     Assess a clawback penalty on any hospital (receiving a certain level of revenue from taxpayer dollars) that has an annual operating margin above a predetermined cap.

     Assess a clawback penalty on any hospital receiving a certain amount of taxpayer dollars that provides a compensation package for its CEO that is greater than 100 times that of hospital’s lowest paid employee.

     Establish a Medicaid Reimbursement Enhancement Fund (MREF). The MREF will be funded by the assessments and used to increase Medicaid reimbursement rates to eligible hospitals to ensure access to essential health care services.

The FACTS about hospital profit margins

     Data reported to the Massachusetts Center for Health Information and Analysis shows that Massachusetts hospitals’ total surplus for FY 2012 increased by 54 percent over the previous year, to $1.286 billion.

     For FY2012, large teaching hospitals saw a 4.8 percent increase in total profit margins while many smaller community hospitals posted a loss, further widening the gulf between the “haves” and the “have nots.”

The FACTS about hospital CEO compensation

     According to a 2013 report by the Massachusetts Attorney General, eight Massachusetts hospitals paid their CEOs in excess of $2 million annually in 2011. This includes hospitals receiving tens of millions in taxpayer funding to provide care for underserved populations.

     A recent JAMA Internal Medicine study found that there is absolutely no correlation between hospital CEO compensation and important hospital quality indicators, including mortality rates, readmission rates, or the amount of charity care these institutions provide.

The FACTS about declining access to essential services

     Between 2012 and 2013, UMass Memorial Hospital closed an entire medical-surgical hospital floor and laid off workers while posting more than $70 million in profits.

     In 2013, Partners Health Care closed a pediatric unit at Cooley Dickinson Hospital in Northampton, despite posting profits of more than $350 million.

     In recent years, Baystate Health has eliminated a number of services, including urology and pediatric services at Baystate Franklin Medical Center, despite posting hundreds of millions of dollars in profits over the same period.

     This year, North Adams Regional Hospital, one of the “have not” facilities in the Commonwealth, closed its pediatric and psychiatric units, even though the DPH ruled these were essential services for that community. This is a facility and a community that could benefit from the new fund created by the HPTFA.