New Data Shows Income Up, but Investment
Losses Keep Many Hospitals in the Red

New Information Comes the Same Day Another Woman Files Suit
Against UPMC for Falsifying Pap Smear Records

(2/20/2004) -- A new report from the Pennsylvania Health Care Cost Containment Council (PHC4) has revealed that average net income among the hospitals rose in fiscal year 2002, but that almost half of the state’s hospitals lost money overall for the year because of “poor investment returns and the decreased value of investment securities” according to the Harrisburg Patriot-News.  The Council is an independent state agency that monitors the finances of hospitals and the cost of health care. [Harrisburg Patriot-News, 2/19/04]

In addition to the investment losses and increases in costs some hospitals have had over recent years, experts also point to decreased reimbursements and cite the upcoming implementation of the Medicare prescription plan as a real cause of concern for hospitals future liquidity.  “The reimbursement environment is really difficult,” said David Gallatin, acting chief executive officer of Westmoreland Health System in Greensburg. “No one's decided how [the prescription drug plan is] going to be paid for yet.”

Interestingly, this new PHC4 report comes just one week after it was revealed that the Hospital & Healthsystem Association of Pennsylvania (HAP) would fight a requirement that the Commonwealth’s hospitals detail to PHC4 the number of infections that occur in their facilities.  The PHC4 makes public that information.  In a landmark study, the U.S. Agency for Healthcare Research and Quality and Johns Hopkins University found that medical errors in hospitals kill tens of thousands of patients annually and add $4.6 billion to health care costs. The report, published in the Journal of the American Medical Association, echoes similar findings from the Institute for Medicine. [Wall Street Journal, 10/8/03]

The new report from the PHC4 also came the same day that yet another doctor has filed suit against the University of Pittsburgh Medical Center (UPMC) alleging the hospital mishandled and tried to cover up mistakes in Pap smear tests at the hospital.  Two other physicians at UPMC had earlier filed suit against the hospital alleging that doctors and administrators at UPMC falsified hundreds of thousands of cancer screenings, allowed systemic errors to occur and subjected cancer patients to unnecessary testing in order to increase profits. At least some of the physicians apparently suffered retribution for speaking out. [Pittsburgh Tribune-Review, 12/18/03]

In the coming weeks, the Pennsylvania Senate will debate whether or not to impose arbitrary caps on compensation in every civil suit.  Although the genesis of the caps movement was originally to assist those doctors who have struggled with high malpractice premiums, the efforts has been broadened.  Recently, Senate Majority Whip Jeff Piccola announced that he would not support any limits that were specific to medical malpractice.