Hospitals defend community giving

Kirsten Searer

Friday, April 8, 2005 | 9:53 a.m.

CARSON CITY -- The Assembly Health and Human Services Committee will hold a meeting in Las Vegas Saturday to hear whether hospitals should return more money to their communities.

Assembly Bill 322 would require hospitals to return a portion of their profits to community programs.

Assembly Speaker Richard Perkins, D-Henderson, said hospitals in Nevada make millions in profits that go to out-of-state corporate headquarters.

While hospitals have community programs now, they aren't always "doing it in a fashion that's helpful to the community," he said.

"They've got an obligation to be mindful of the community needs and reinvest in the community," he said.

Nevada Hospital Association president and chief executive Bill Welch said he's "concerned" about the legislation.

"It seems to me the hospital community is being singled out," he said.

Hospitals already do significant work in the community through health fairs, scholarships and other programs, he said. In 2004, Nevada hospitals absorbed about $204 million in medical costs that patients were unable to repay, he said.

And hospitals are putting money into the economy, he said. The state's hospitals have spent $1.3 billion in recent years to build new hospitals and update technology, while they made $333 million in profits, he said.

"The suggestion that all this money is leaving the state is a misrepresentation of what's happening," he said.

Welch argued that the hospital business is less profitable in Nevada than other states because companies are building new facilities and the state has a high level of people who are on Medicaid or are uninsured.

Profit margins in the state range between 1.8 percent and 2.2 percent in Nevada, while the national average is 3.3 percent, he said.

Perkins said he isn't picking on the hospital industry but reaching out to a group that makes profits in the state but could provide more much-needed services.

Under his bill, hospitals would have to work with communities to develop a "community benefits plan" based on the needs of each specific community. Hospital administrators would be charged with following through on the plan.

The benefits could include free care, programs targeting "vulnerable populations," health research or other initiatives approved by the state.

The state could impose a fee of between $1,000 and $10,000 a day against any hospital that fails to file a community benefits plan or an annual report of what benefits it extended to the community. It could also revoke the hospital's license.

Ann Lynch, a lobbyist for Sunrise Hospital, said the hospital already gives to the community but is concerned about the extra administration it might need to comply with the act.

"The requirement that we form a group of people at the hospital that would have to oversee this adds more cost," she said.

Sunrise gave more than $500,000 last fiscal year to charities, health fairs and other community programs, she said. The hospital also spends about $1 million each biennium on checkups for kindergarten students, she said.

And in the last three years the hospital has invested $200 million in capital improvements, putting more money into the community, she said.

"We are responding to community needs," she said.

Another bill set to be heard Saturday is Assembly Bill 342, which would require hospitals to report more data on costs and services in an effort to shed light on what is driving increases in hospital costs.

Assemblywoman Sheila Leslie, D-Reno, said the bill was drafted in response to a health care crisis in February, when the Health Services Coalition -- representing union and employee groups for teachers, firefighters, hotel and casino workers, carpenters, cement masons and plasterers, police officers, electricians, plumbers, convention workers, trash collectors, truck drivers and grocery workers -- was temporarily unable to negotiate payment rates with Las Vegas Valley hospitals.

Union representatives said then that hospitals requested huge jumps in rate increases. Leslie said she made a commitment to find out why hospital costs are rising so quickly.

The meeting will be held at 10 a.m. Saturday at the Sawyer State Office Building, 555 E. Washington Ave., and is open to the public.