Las Vegas Sun

March 29, 2024

Bill aims to ensure hospital revenue reinvested locally

Nevada hospitals would have to ensure they were spending a portion of their revenue locally before sending money to out-of-state headquarters and would have to provide more financial information to the public if state legislators get their way.

The Assembly Committee on Health and Human Services held a meeting in Las Vegas on Saturday to give local health care consumers a chance to tell their stories about rising health care costs and access to care. More than 100 people -- mostly members of the Health Services Coalition -- packed the Sawyer State Office Building to show support for hospital reform.

Assembly Committee Chairwoman Sheila Leslie, D-Reno, and Assembly Speaker Richard Perkins, D-Henderson, introduced companion bills that would require Washoe and Clark County hospitals to reinvest in their communities and be more transparent about their operations.

Leslie's bill requires hospitals to report quality information and all hospitals with more than 100 beds -- primarily Las Vegas Valley hospitals -- to undergo an annual audit. The bill also requires hospitals to provide financial information including a capital improvement budget for the upcoming year and profit statements with information on how the money is distributed.

"It's designed to allow sunshine into the system," Leslie said. "I have no doubt hospitals reinvest in their communities at some level. We just don't know how much."

Perkins' bill would require hospitals in Clark and Washoe counties to reinvest 4 percent of their operating revenue in Nevada before sending money to corporate headquarters.

The reinvestments could include unreimbursed health care, public education and preventive health programs, transportation, medical supplies and equipment and prescription drugs.

Hospitals that do not meet that requirement would be fined and could be investigated by the attorney general's office, Perkins said.

"We're glad these companies chose Nevada to do business as we are always at the bottom of the list in terms of health care access, and so we need all the help we can get," Perkins said, adding that while a free market is good, it is not working for local hospitals.

The bills were introduced after contentious negotiations between Las Vegas Valley hospitals and the coalition that represents more than 300,000 Las Vegas workers.

Andy Brignone, lawyer for the Health Services Coalition, spoke on behalf of the group and said it was critical that hospitals let consumers know in advance what they are paying for and how much it cost.

He compared hospital disclosure with auto repairs, saying if the Legislature thinks it is important enough to require mechanics to disclose their prices and services up front, the same standards should apply for human body repairs.

"We want the hospitals to be successful and profitable, but we don't want them to break the backs of Nevada employees and businesses," Brignone said.

The coalition is made up of unions and employers who represent teachers, firefighters, hotel and casino workers, carpenters, cement masons and plasterers, police officers, electricians, plumbers, convention workers, trash collectors, truck drivers and grocery workers.

Bill Welch, president and chief executive of the Nevada Hospital Association, said there are sections of the bills that the association supports and sections it opposes.

He said hospitals already provide to the state much of the information that is being requested, but they may need to provide it in a form that is more understandable.

As for the concerns about hospital profitability, Welch said the American Hospital Association reports profit margins for Nevada hospitals average 1.8 percent, compared with 3.3 percent nationally.

Also, there are several factors that drive Nevada hospital costs including a disproportionate number of uninsured people, a rapidly growing population and an increasing number of people using emergency rooms for their primary care, Welch said.

Jim Wadhams, a lobbyist for the Nevada Hospital Association, said today that the association does not have a problem with the state analyzing community investments, but it does have a problem with a mandatory reinvestment amount, especially when the hospital industry is "being singled out."

"This doesn't apply to Wal-Mart, casinos or anybody else," he said. "A mandatory percent of reinvestment made based on revenue that is not applicable to all industries would be not be appropriate and would add to the cost of health care."

The more free care providers give, the more costs that are absorbed by insured people -- which is what most of the coalition members are, Wadhams said.

He said hospitals currently spend millions of dollars in capital improvements through new hospitals, expansions and additional services and many of the investments are made as a capital sacrifice in the short term in the hopes of a long-term return on investment.

"The growth in hospital beds has been almost exclusively out of the private sector," Wadhams said, adding that Nevada ranks last for beds per capita.

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