Mission Hospital’s patient care profits have skyrocketed since its purchase by HCA Healthcare in 2019, largely because of cost cutting measures that have led to significantly lower staffing levels than at hospitals across the state and nation, according to public data.
A 12-page working draft report out of Wake Forest University titled “Mission Hospital’s Financial Performance Under HCA” collates information from federal data, HCA’s own projections, and other studies to show how the Asheville hospital has prospered since the $1.5 billion purchase five years ago.
In 2019, Mission’s profits from patient care were just under $20 million, according to the draft report. By 2021, it made $221 million, ”which was eight times its profits the year prior to purchase (2018), and almost six times its four-year pre-purchase average,” the draft report stated.
Patient care profits represent a portion of the overall profits of the hospital, which include returns on investments. Mission’s overall profits in 2019 were $170 million. By 2021, they had risen to $273 million before dropping in 2022 to $156 million, according to the draft report.
Patient care profit, according to the draft report, appears to be directly related to a much smaller full time staff. After the sale, costs went down, prices for services went up, and Mission saw a significant decrease in employees who care for patients, the report concludes.
Mission’s staffing rate per occupied bed dropped from 6.0 in 2018 to 4.7 in 2019. In 2020 that rate stayed steady at 4.7. But in 2021, it dropped to 3.7, according to the draft report.
“(P)rior HCA, Mission’s overall staffing levels were above state and national averages, but, under HCA, staffing levels immediately dropped by almost a quarter,” the draft report stated. “Then, two years later, staffing dropped further, to a level that is roughly a third less than state and national levels,” the draft report stated.
Projections laid out in Mission’s own certificate of need application to bring 67 more hospital beds to the Asheville hospital show HCA expects to continue its financial trajectory. The company projected that its profits for acute care services would increase an additional 75 percent from 2021 to 2026.
“These findings should give lawmakers here and elsewhere pause about the decision North Carolina made in 2016 to terminate antitrust oversight of the Asheville hospital market,” Mark Hall, the draft report’s author, told Asheville Watchdog, referring to the certificate of public advantage. “Without those financial guardrails, this track record shows that other background regulatory and market controls exert much less restraint on how a for-profit company manages a hospital that has a dominant market position.”
Mission has faced significant scrutiny recently after state and federal investigators found the Asheville hospital had violated care standards in more than 15 incidents between April 2022 and November 2023. Following investigators’ findings, the U.S. Centers for Medicare & Medicaid Services (CMS) notified HCA and Mission that the hospital would be placed in immediate jeopardy until conditions threatening patients were amended.
The immediate jeopardy status, the most severe sanction a hospital can face, was removed in March, but because of numerous deficiencies, Mission remains at risk of losing U.S. Centers for Medicare & Medicaid funding.
The incidents included the deaths of four patients, and according to a 384-page North Carolina Department of Health and Human Services and CMS investigation report, staffing issues played a part in each of those cases.
The findings are part of a larger report Hall is working on, set to be published later this year.
“This writing was funded by a group that is funding litigation against Mission Health. It is not an impartial ‘study’ and it does not justify comment or response,” HCA and Mission Health spokesperson Nancy Lindell said when asked for comment on the draft report. She did not respond to several questions for more detail about hospital profits, staffing and Mission board members’ internal discussions when approving the HCA sale.
Hall, a member of the National Academy of Medicine, is a leading scholar on health care law, public policy, and bioethics, and the author or editor of 20 books. He recently wrote other draft reports that said HCA has significantly decreased charity care for lower-income Mission patients since its purchase of the hospital and that showed the discrepancy between Leapfrog and Healthcare ratings for quality at the hospital and the recent federal finding of immediate jeopardy.
He is an independent academic researcher whose work is funded through an Arnold Ventures grant to Wake Forest University.
Arnold Ventures is a philanthropic group headquartered in Houston “working to improve the lives of all Americans by pursuing evidence-based solutions to our nation’s most pressing problems. We fund research to better understand the root causes of broken systems that limit opportunity and create injustice,” according to its website.
Arnold Ventures is helping to fund Fairmark Partners — a group pursuing antitrust lawsuits against “hospital behemoths in Wisconsin, Connecticut, and North Carolina,” according to the group’s website. Attorneys at Fairmark are representing plaintiffs in a western North Carolina antitrust lawsuit against HCA and Mission Hospital.
Profitability spikes far above peers’
Much of the draft report compares Mission with a set of 11 other hospitals in North Carolina and South Carolina that were used by North Carolina Attorney General Josh Stein’s office, state regulators and Mission when evaluating the proposed sale to HCA. All parties agreed that these hospitals were valid comparisons, based on their size, scope of service, market and location, according to the draft report.
While Mission and the 11 other hospitals followed relatively similar fiscal paths between 2011-2019, Mission’s veered dramatically after the sale.
Mission’s patient care and overall profit margins first plummeted in 2020 then spiked far above its peers in 2021, according to the draft report.
“HCA Mission went from a loss level at the bottom of the peer range in 2020, to a very large patient-care profit margin of 17% in 2021,” the draft report stated. “Mission’s profit margin exceeded any other peer comparison hospital and was much higher than the peer average, which was essentially zero. … Despite the instability caused by the COVID-19 pandemic, over HCA’s first four years of ownership Mission went from the lower end of patient-care profitability to the top of the range among these peer hospitals.”
The draft report looks at two ways all hospitals boost profits: increased prices and reduced costs.
It found that prices did go up for patients, which the draft report said, is common: “(A)lmost all hospitals maintain list prices with a markup that is surprisingly or shockingly high.”
Few patients actually pay the full amounts for their care, the draft report explained, but for some, list prices are the basis for negotiating discounted payments. Being billed these amounts also can harm patients’ credit.
Mission has steadily increased its list prices since 2011, according to the draft report. After HCA bought the hospital, prices shot up more quickly and were much higher than the average list prices of the 11 peer hospitals, according to the draft report.
“Under HCA… Mission’s annual mark-up increases doubled, averaging 33 percentage points a year (or 30 points disregarding the 2019 transition year),” the draft report stated. “These accelerated price increases propelled HCA to the top of this peer range within just two years, which is especially notable considering that, over this same time, the average for peer comparison hospitals remained essentially level.”
Even though these price markups have been significant, they don’t fully explain Mission’s significant profit margins, according to the draft report.
Two things have played a role in those profits. One is how much it charges patients for care, or “cost-control,” according to the draft report.
“Mission’s Medicare profitability has skyrocketed under HCA,” the report stated. “Prior to HCA, Mission Hospital on average lost 4 percent each year on Medicare patients. Within three years after HCA’s acquisition, however, it was making almost a 15 percent profit on Medicare patients, and in 2022 continued to make 6 percent (with a three-year average of 10 percent). That remarkable increase pushed Mission from below the peer hospital average to near the top of the peer range, with only one hospital making more (Cape Fear at 13%).”
But Mission’s profits have benefited the most from deep cuts to hospital staff, according to the draft report.
“Following HCA’s acquisition… staffing plummeted in just a single year, from above the peer average to the bottom of the range, and staffing has remained at a level that is 30 percent below the peer group average,” the draft report stated.
The draft report relies on data from a State Employees International Union analysis published in 2022 to show Mission’s staffing of full-time equivalent employees per occupied hospital bed was lower than the state and national averages between the most recent years for which data was available: 2019-2021.
Before 2019, that rate at Mission was higher than the state and national averages.
Though staffing data can be measured in various ways, the draft report says, each of those
points to a consistent conclusion: “Sharply reduced staffing for patient care under HCA explains a large component of the hospital’s markedly increased profitability under HCA. … HCA’s reported data provides only limited insight, but .. much of its total expenses are concentrated in labor costs, and… the very large majority of labor costs are devoted to patient care rather than administration.”
This seems to contradict what board members were told as they considered approval of the HCA sale, according to the draft report, namely that improved financial performance would primarily happen “through purchasing power and back-office efficiencies.”
Data HCA and Mission submitted to NCDHHS in 2022 as part of its “certificate of need” application to add 67 more beds to the Asheville hospital suggest that such cost savings probably won’t be Mission’s main profit driver through 2026, according to the draft report.
Should Mission continue to boost profits through staff losses as it has since 2019, that trajectory would align with what nurses and doctors say they have experienced over the past five years after the sale and continue to experience today.
In a lawsuit filed against HCA and Mission last December, North Carolina Attorney General Josh Stein, the Democratic candidate for governor, argued that the hospital company reduced staff and resources in emergency department and cancer care services, leading to patient harm and violating two of 15 commitments it made to keep services open and running for 10 years after the 2019 sale.
HCA countered Stein early this year in North Carolina Business Court, saying it had never made a commitment to provide quality care.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Andrew R. Jones is a Watchdog investigative reporter. Email arjones@avlwatchdog.org. The Watchdog’s reporting is made possible by donations from the community. To show your support for this vital public service go to avlwatchdog.org/donate.
Healthcare for profit is immoral.
Sounds like HCA should hire a corporate analyst to better allocate Human Resources and dump the hatchet man.
HCA people should be forced to go to Mission for all their medical needs. Messed up to just gut it for as much money as possible at the expense of patients’ health.
My husband just left Mission following an auto accident. I don’t have any complaints about his er or care while in icu, but once he was moved to a regular room, his care significantly decreased. The staff on hand was courteous and professional. The problem was that there was little staff on hand, particularly on the weekends. I won’t go into detail, but I will say he was unable to get any help in a timely manner when he summoned for help. Furthermore, important care was missed, and if not discovered by family members would have been left untreated until his medical situation had become more dire. As it was, he had to receive additional treatment for overlooked medical problem. Sure hope they ask me for a review of his stay and care. I do want to reiterate that the staff on hand did their best.
How can HCA use as a defense that they never promised to provide quality care? Isn’t that an admission of guilt?
I am afraid that HCA saw Mission as an easy, trusting takeover target that they just couldn’t resist. WNC is paying the price for the Board’s actions.
Yes, quality is inherent in any service especially one that deals with human lives. As I explained to the Dogwood Trust Rep. If you buy my local Jiffy Lube it is a given that when I take my car in for an oil change you will replace my oil with oil not water.
Basically agree with Weaverville. There are some industries that should not be for-profit. Healthcare is one. Education is another. And, Savings and Loan, if they had not already been destroyed by the transition to for profit,
Why aren’t the people who approved this sale being held accountable?
Mission directors during the time of sale:
John Robert Ball, MD, JD (chairman)
Janice W. Brumit (past chair)
Daniel A Casse, joined board 1/1/2018
Suzanne S. DeFerie, joined board 1/1/2018
Bridget A. Eckerd
Kristy Elliott, joined board 1/1/2018
Winston Leon Elliston, MD
Paul “Chris” Christopher Flanders, MD
John William Garrett, MD (vice-chairman)
William S Hickman
Lynn Kieffer
Thomas A. Maher
Robert M. Moore Jr., left board 12/31/17
Thomas Allen Oreck
Peggy (Margaret E.) O’Kane, left board 12/31/2017
Anne Ponder
Kenneth G Racht
Jeffrey “Jed” E. Rankin
Robert C. Roberts, left board 12/31/2017
Robby Russell
Lavoy Spooner Jr., joined board 1/1/2018
Wyatt S. Stevens
Senior leadership
Ronald A. Paulus, President and CEO. (Paulus is now President and CEO of Maribel Health in Santa Monica, Calif.)
Charles F. Ayscue, SVP and CFO, departed Jan 2018
Ann Y. Young, General Counsel
As Trustees of the largest non-profit in this part of the State, the members of the Mission Board of Directors had one primary duty: promote and protect the health care of the citizens of WNC as delivered by the Hospital System. They failed utterly. Now we all must pay the price.
Sadly, this isn’t news to some of us. Of course patient care and staffing suffered in exchange for profits. This is how a Corporation works. For God’s sake, the word corporation is in their name. Everyone saw this coming, yet sale still took place.
Interesting when the Nurse’s Union complains about short staffing HCA’s Nancy Lindell struts out and attributes our well documented complaints to “ union antics” , hyperbole or outright lies. We are continually vilified for fighting for improved staffing and (gasp) having the nerve to demand a break to go to the bathroom . Or worse yet , expect our patients to have adequate coverage while we take 30 , yes folks you heard me ! An entire 30 minutes out of a 12 plus hour shift to eat. Oh wait! Yes, I know , how could the staff be even more unreasonable ? Nursing mothers would like to be able to leave the floor to pump in private rather than pump while caring for patients! Nurses are so unreasonable .
Managements response ; go eat, go pump . No one is saying you cannot . I mean HCA loves you! We value you. Staff adequately? Well no, but look we put up billboards and asked the public to send you love notes!!!!! HCA will not provide ( pay ) for meal coverage. Why ? because we know you will not leave your patients unattended to take your lunch ( or pump, or bathroom break). You care we do not.
Don’t like the way we treat you? Go elsewhere . Yes, they have said that to us. Over 5 billion in profits but we have beds that won’t steer or roll.
Profits don’t equal healthcare… they are to enrich the Frist family that owns HCA along with the other shareholders. Period. Welcome to for profit healthcare in the USA. ( …btw, the Frist family …as MAGA as they come over there in lovely Tennessee)
You have all the proof you need to close the Hospital or sell it. Do something now and quit procrastinating. The people of Asheville deserve better. Move now.
Hospitals should never, ever, be for-profit. As we can easily discern, it only benefits the corporation and its shareholders, not the patients who they are supposed to be serving.
Well at least the investors are healthy.
okay, so here’s the deal ( it seems so very obvious but let’s just spell it out) ..Paulus and Green were in collusion with HCA to mislead the Mission Board of Directors in order to defraud the non-profit.
Time for a grand jury ….way past time actually.
-Collusion, a noun that refers to a secret agreement or cooperation for an illegal or deceitful purpose.
-Defraud, a verb that means to take something illegally from someone by deceiving them.
Agreed, maybe a non partisan committee should look into the sale to see if any laws were broken to achieve the sale.
Stop letting private equity buy into the healthcare field! Pass a law federal that this is illegal. Their interest is always profit only!
Voice I agree, the only real accountability HCA can be brought in the courtroom is criminal liability. So many people say lawsuits as Good Justice for large corporations at abuse our power right? And there is some justice especially if these mega corporations have to sell out millions of dollars or more right?
But from what I can tell ultimately Rich corporate executives don’t care much about civil penalties. They’re already rich, and HCA’s case they’re freaking billionaires and they already had to settle a 1 billion dollar lawsuit all those years ago. Did that stop them? Did that make them strive to have more integrity? Heck no! So at this point it doesn’t matter how much you sue HCA for, criminal liability is really it. Jail time behind bars for many many years and no getting out early due to supposed a good behavior or parole! These people need to lose all their freedom, not just a small hit to their vastly large pocketbooks! And of course finding these people criminally liable is much harder than a civil trial but it really needs to be done!
T
Just as I predicted and stated to several board members. They will increase the charges enormously to be able to make the profit that they require. Honestly, I thought due to quality standards, monitoring organizations , and concerns the staffing would not change.
Shame on me..
But again, I ask – why don’t the board members speak up and try to fix this situation . What is the real risk of speaking up even thought they signed the ndas? What is their REAL risk?
To Concerned and Voirdre above:
First, as to the issue of NDAs and Non-disparagement Agreements, as a matter of good public policy neither of those should have been allowed or accepted by the Board in the transfer of the largest non-profit health care system in this part of the State to a for profit enterprise. Everything should have been open and transparent to the public. That’s bad on the Board, its law firm and the Attorney General for allowing that. Second, as to a criminal investigation, it seems that there are enough questions in how Paulus and Green maneuvered and apparently steered this to HCA (especially in light of the payout of over $4 Million to Paulus due to the sale, in addition to his future compensation arrangements with HCA in a publicly undisclosed amount) to at least merit a review by the District Attorney’s Office. Todd Williams, where are you?
I had a few days there in late 2022. The ER did their job admirably, The medical care afforded me was very good. The nursing care was timely and caring. The food was good enough.
However, there was no janitorial staff in evidence . . . yuk, there were drops of dried blood (mine) on the floor the entire time and my bathroom was never cleaned. 🙄
Addressing the comments concerns from the person called concerned hospital worker:
I actually did have an a visit to the mission hospital room two days ago. And it was surprisingly good for me, my experience at least. I didn’t have to wait at all after my initial check-in. I literally got escorted to a little separate waiting room with a comfortable chair. I waited 5 to 10 minutes for a doctor to show up to describe my symptoms and then a short time later and orderly came by and took my blood for a blood test. And every time I had to wait to go to the next step in my visit, it was short and all the nurses and doctors are actually pretty friendly! I have been very anxious and thinking very negatively about my visit to the emergency room but I just went ahead and took the plunge. And it was very good! So I do believe you to some extent that even with that federal agency finding all those deficiencies and making HCA tighten up, that overall it won’t make things much better? At least not long-term right. But I have to say base on my own personal experience there two days ago, at least some of it is positive. Didn’t have to wait at all, not even 15 minutes which is unheard of to me! And I got great care there so just don’t be completely down about it. Obviously I could go back a year from now and it could be horrible right? But I just want to express a small bit of positivity in this giant sea of a terrible situation with HCA that’s all