November 25, 2020 | FAH Policy Blog Team
Category: Non-profit, Statement
In response to the report by the National Nurses United union, FAH President and CEO Chip Kahn said, “Frontline caregivers are the lifeblood of our facilities and are sacrificing so much amid the novel coronavirus pandemic to provide quality care to patients across the country. We’re in this together. So it is unfortunate that during this critical time a labor union has put out a report designed to be divisive with attacks using meaningless statistics like the charge-to-cost ratio. The analysis is neither meaningful to the patients we treat every day, nor useful in comparing hospitals, or reflective of how hospitals serve their communities.”
A better way to compare hospitals is to examine what they are actually paid. When we assess payment-to-cost ratios rather than charges, which are rarely relevant in that regard, the analysis points to a more accurate picture. That’s because Medicare and Medicaid payments are dictated by the government and insurers pay rates negotiated with hospitals. So, it is not surprising that there is no meaningful difference in payment to cost ratios between the 100 hospitals named in the report: 1.3 and everyone else 1.2.
In addition, the union’s report ignores what most matters in securing the social safety net. When we look at uncompensated care for the so-called “Top 100 charge-to-cost hospitals” we see they are top performers for community benefit. They commit 8 percent of their costs to uncompensated care compared to 5.3 percent for all other hospitals.
If there was ever a time to rise above attacks using throwaway numbers that mislead to promote a narrow agenda, it is now. Let’s stay focused on defeating COVID-19. That’s what patients and communities deserve, and that is what we owe them.
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