As Tenet Healthcare Spends Tens of Millions to Prolong a Nurses’ Strike for Safer Patient Care, State Lawmakers to Examine Legislation Aimed at Increasing Hospital Profit Transparency and Protecting Essential Healthcare Services During June 29 Live-Streamed Hearing
Nurse from St. Vincent Hospital to testify about need for CEO pay and profit limitations and the actions of Dallas-based Tenet Healthcare, which forced nurses to strike for safer patient care after taking $2.8 Billion in pandemic funding from taxpayers to pad its bottom line and post profits in excess of $500 million
BOSTON, Mass. – Nurses and advocates will testify during a State House hearing on Tuesday, June 29 in favor of legislation to strengthen protections for threatened essential healthcare services such as maternity and behavioral health care, and to create additional disclosure and limitations on hospital profits and CEO pay.
The hearing of the Joint Committee on Health Care Financing comes as closures of hospitals and hospital units by healthcare executives have continued unabated during the COVID-19 pandemic and hospital systems such as Tenet Healthcare – the owner of St. Vincent Hospital where nurses have been on strike for safer patient care for more than 100 days – rack up profits by using CARESAct pandemic funding, and a bare-bones staffing model that endangers patient care and exhausts front-line caregivers.
What: Hearings on H.1253/S.754 An Act Relative to the Closing of Hospita Essential Services, sponsored by Senator Julian Cyr and Representative Ed Coppinger, H.1262 Essential Service Closures During State of Emergency, sponsored by Representative Patricia Duffy, and S.805/H.1255 The Hospital Profit Transparency and Fairness Act, sponsored by Senator Michael Moore and Representative Josh Cutler.
When: Tuesday, June 29, 11 a.m.
Where: Virtual Hearing. To watch, go to: https://malegislature.gov/Events/Hearings/Detail/3796
Hospital Profit Transparency and CEO Pay
Hospitals on average receive more than 50% of their funding from public sources, including the tax dollars of Massachusetts residents. Yet the corporations that own these hospitals make tens or hundreds of millions of dollars in profits each year – even during a year when the COVID-19 pandemic swept across the globe and hospitals closed services and furloughed caregivers. The public and policy makers have the right to know if our tax dollars are being spent to benefit patients or boost hospital executive pay and to pad their profit margins.
“Tenet Healthcare is a perfect case in point,” said Marie Ritacco, RN, and Bargaining Committee member at St. Vincent Hospital and MNA Vice President who will testify on Tuesday. “Tenet Healthcare is one of the nation’s largest and most profitable hospital corporations and St. Vincent is among the most profitable hospitals in the Commonwealth. Yet Tenet furloughed staff, implemented daily staffing cuts, and forced nurses to work with unsafe patient assignments every day and every shift.”
According to the most recent financial report, St. Vincent Hospital had a profit margin of 14 percent, four times the state average for hospitals, with a whopping 67 percent of its revenue derived from the taxpayers in the form of Medicare and Medicaid payments.
In 2020, Tenet embarked on a scheme to use furloughs, staffing/benefits cuts and more than $2.8 billion of taxpayer funding from the CARESAct stimulus package, money that was meant to provide appropriate COVID care for patients, and instead used that largesse to “maximize our cash position,” according to Tenet’s CEO as reported in the Dallas Morning News. Tenet did just that, posting a profit during the pandemic year of $414 million, with more than $97 million in profits for the first quarter of 2021. Tenet’s stock value also tripled, going from a low of $21.76 per share at the beginning of the pandemic to a high of $68.15 as of June 10, 2021 – during a pandemic.
“We are now engaged in the longest nurses strike nationally in over a decade, and the second longest strike in Massachusetts history, with Tenet refusing to negotiate and now threatening to permanently replace us,” Ritacco said. “Tenet has spent more than $75 million to date to prolong this strike. A fraction of those funds could have easily met our demands for the staffing improvements that are the sole issue driving us to strike.”
“We have created a healthcare system of haves and have nots in Massachusetts, a system of winners and losers, where the mega healthcare corporations, like Tenet, are the winners and too many patients and communities, like mine, are the losers,” Ritacco said. “The public has a right to know how and where their health care dollars are being invested. Our hospitals, no matter who owns them, are a public trust and our safety net, and this initiative is designed to give some long overdue control back to the taxpayers and help protect that safety net.”
"It remains essential for hospitals to prioritize the safety of patients and the welfare of their employees before profit margins" said Senator Michael O. Moore, (D-Millbury). "For too long, rising costs have strained the budgets of both patients and the Commonwealth. Oversight is critical to ensure that, as patients and taxpayers, Massachusetts residents have a clear understanding of how their healthcare dollars are distributed."
To address these issues, S.805/H.1255 The Hospital Profit Transparency and Fairness Act will:
- Require hospitals to be transparent about their financial holdings and other activities.
- Assess any hospital receiving taxpayer dollars that has an annual operating margin above a specific, predetermined cap.
- Assess any hospital receiving taxpayer dollars that provides a compensation package for its CEO that is greater than 100 times that of the hospital's lowest paid employee.
- Deposit assessments in a newly created Medicaid Reimbursement Enhancement Fund to increase Medicaid reimbursement rates to eligible hospitals as a way to claw back excess profits and ensure that taxpayer dollars are dedicated exclusively to safe patient care and necessary services for all communities in the Commonwealth.
Strengthening Hospital Closure Law
Massachusetts hospital corporations have closed dozens of hospitals or hospital units over the last 10 years, including during the COVID-19 pandemic. At least 10 of these services were deemed “essential services” by the state Department of Public Health, but executives closed them anyway.
“Executives are operating hospitals – paid for by our tax dollars – like Wall Street banks and real estate holding companies rather than vital community resources,” said practicing ICU RN and Massachusetts Nurses Association President Katie Murphy. “Patients should be getting more high-quality care near where they live, not less care 30 miles away because a hospital CEO decided to value skyrocketing executive pay over the healthcare needs of the most vulnerable members of our society.”
In a White Paper published in March 2021, the MNA’s Congress on Nursing Practice called for a moratorium on any further closure or reduction in maternity services including midwifery services in the Commonwealth.
“The Massachusetts Nurses Association identifies access to reproductive care, including
maternity and birth-related services, as essential to racial and social justice,” members of the Congress on Nursing Practice wrote. “Unfortunately, due to the state’s lack of any viable regulatory authority to protect these and other public health services, and a privatized health care system that values a market-based health care model over its mandate of ensuring the communities it serves the full spectrum of health services, including maternity care, too many families are seeing their access to these services curtailed, placing both mother and newborns at unnecessary risk, particularly those living in poorer communities and communities of color.”
S.754/H.1253 An Act Relative to the Closing of Hospital Essential Services will:
- Extend the official notice period to the DPH in advance of a closure or discontinuation of health services.
- Require any hospital proposing closure or discontinuation of health services to provide evidence of having notified and provided the opportunity for comment from affected municipalities before the notification period begins.
- Instruct the Attorney General to seek an injunction to maintain the essential services for the duration of the notice period.
- Prohibit the hospital from eligibility for an application for licensure or expansion for a period of three years from the date the service is discontinued, or until the essential health service is restored, or until such time as the DPH is satisfied with a modified plan.
S.1429/H.1262 An Act Relative to Preserving Essential Services will:
- Prohibit the closure of beds, units, or facilities during any declared state of emergency pertaining to health care.
- During the pandemic, we saw the closure of an Emergency Departments in Somerville and Natick, the loss of 74 inpatient psychiatric beds serving children and adults in Holyoke, the temporary closure of two Intensive Care Units (ICUs) and proposals to close maternity units, birthing centers, substance abuse rehabilitation programs and additional mental health beds.
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Founded in 1903, the Massachusetts Nurses Association is the largest union of registered nurses in the Commonwealth of Massachusetts. Its 23,000 members advance the nursing profession by fostering high standards of nursing practice, promoting the economic and general welfare of nurses in the workplace, projecting a positive and realistic view of nursing, and by lobbying the Legislature and regulatory agencies on health care issues affecting nurses and the public.