Editorial: Hospital expansions, costs need checks for patients
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The number of names in the hospital game is shrinking, even in a state abundant with facilities. Large hospitals buy smaller ones to create health systems. Health systems merge to create regional or statewide networks.
On top of that, the building of more facilities happens steadily. More beds, more services, more locations.
In Southwestern Pennsylvania, two of the biggest dogs in the state are UPMC — both the hospitals and the insurance company — and insurance giant Highmark and its provider arm, Allegheny Health Network. But they aren’t the only game in town. Excela Health is merging with Butler Health System. Then there’s West Virginia University Health System, Penn Highlands, Indiana Regional Medical Center and more.
AHN is on a building binge, with five new hospitals and six cancer centers. UPMC has three major investments on the horizon, with a cancer hospital on the drawing board, a vision hospital opening in 2023 and a heart and transplant center coming in 2026.
Meanwhile, smaller networks are focused on survival, merging to keep the doors open.
“I think Excela is in a better position now than it would have been if we would have continued to compete as individual hospitals,” said Douglas Clark, former CEO of Latrobe Hospital and former Excela president.
That should make health care available and accessible for Pennsylvanians. But does it?
The question is not about open beds and convenient locations. The kind of availability and accessibility many people need is about another A-word: affordability.
Someone has to pay for all the buying and building. Even though most Pennsylvania hospitals are organized as nonprofits, they still don’t expect to lose money. UPMC’s profits are down 75% so far for 2022, but that’s still $200 million of black ink.
“We expect to see the pandemic’s lingering effects on health care, including higher costs to effectively address staffing, labor and supply-chain challenges, and other operational expenses,” UPMC Executive Vice President and Chief Financial Officer Edward Karlovich said in a statement.
So, if the costs are escalating, it seems likely that more of those costs, as well as purchase and construction costs, are going to be passed along to the consumers.
Except we can’t lose track of the fact this isn’t charging more for eggs because of shipping costs. This is literal life and death.
Pennsylvania has the ability to be a check on this. Gov. Tom Wolf has had a proposal on the table for two years to review these issues of expansion and spending and how they impact hospital costs. Nothing has come of them as the Legislature and governor have spent more time engaged in fistfights than negotiation.
Come January, there will be new leadership in both branches and in both chambers, making it a perfect time to get things done. With more hospitals than 45 other states, Pennsylvania has the ability to be a leader in addressing cost containment and regulation. Harrisburg just has to decide to be on the side of the patients.