by Philippa Rizopoulos
While the Biden administration tries to shore up the Affordable Care Act by increasing health insurance subsidies in the most recent stimulus bill, the nation is still grappling with a more fundamental health care problem — hospital corporations that decide where, how and if someone can be treated if they are sick or injured.
Hospitals receive a third of every dollar spent on health care. While the average profit margin is a healthy 8%, the wealthiest hospitals make far more. John Fox, the CEO of Beaumont Health System, the largest hospital company in Michigan, made $6.75 million for 2019, including a $2.6 million bonus that he received on the same day, in March 2020, that his hospitals treated their first COVID-19 patients.
In fact, Beaumont has been so profitable for so long (despite being technically a nonprofit), that it’s sitting on more than $2 billion in assets. This did not stop the company from applying for, and receiving, $377 million from the government through the CARES act.
In 2018, the U.S. hospital industry made $81 billion, while Americans borrowed $88 billion to pay for their medical expenses.
In theory, our hospital system is designed to guarantee medical care to all those who need it. But hospitals concerned about the bottom line, as most are, can avoid providing care to some by shutting down certain hospitals. Between 2015 and 2019, hospital corporations closed 135 hospitals. Another 18 were closed between January and August of 2020.
When the Astria Regional Medical Center in Yakima, Washington, shut down and filed for bankruptcy in January 2020, 463 employees lost their jobs, and the community was left stranded with only one hospital just as COVID-19 emerged as a major threat. The local government was so alarmed that FEMA had to step in and, working with state agencies, reopen the hospital.
We have seen the consequences of hospital closings over the past year, as communities shuffled COVID-19 patients around between hospitals, nursing homes and residences, in a desperate dance to find enough hospital beds for the sick and dying. But the crisis will persist long after the pandemic is over, as hospitals continue to close across the country.
Around 500 additional hospitals are at risk of being shut down, including the 4 out of every 10 rural hospitals that are considered unprofitable. Each closure means that patients, health care workers, and entire communities lose essential services.
As it stands now, business executives get to decide which communities get a hospital and which don’t. Rather than putting hospitals where there are medical needs, and making sure workers and communities have a say in these decisions, political leaders allow for-profit corporations to base these lifesaving decisions on where they can make the most money.
Of course, hospital closures don’t affect everyone equally. Rural communities and communities of color are hurt the most. More than half of rural counties don’t have a single ICU bed. That means 18 million people live without an ICU bed in their county.
Eleven million people live in counties with no hospitals at all; 8.6 million people live more than 30 minutes from the nearest one. And everywhere there are racial disparities. A recent study in Chicago found that Black neighborhoods are nine times more likely than white neighborhoods to be trauma deserts. Meanwhile, in wealthy neighborhoods where there’s money to be made, hospitals are expanding their facilities.
It doesn’t have to be this way. We can keep private companies from shutting down hospitals in the places they are most needed while sucking up billions of dollars in profits. We can come to regard health care as a human right, not an opportunity for private profit.
Philippa Rizopoulos (philippa@dignityandrights.org) is a One World Fund Fellow at Partners for Dignity & Rights.
