St. Joseph Medical Center could soon have a new owner as the saga involving its current owner, Steward Health Care, continues to play out in bankruptcy court and Congress. Healthcare Systems of America, an affiliate of California-based American Healthcare Systems, took over management of Houston's only downtown hospital as part of an interim settlement agreement approved earlier this month in U.S. Bankruptcy Court. The company intends to assume full ownership of St. Joseph once all the necessary agreements are completed, possibly as early as next week. The interim settlement agreement transferred day-to-day management of St. Joseph from Steward, the nation's largest private for-profit hospital chain that filed for Chapter 11 bankruptcy earlier this year.
California Gov. Gavin Newsom has vetoed a bill that would have given his state the ability to block private equity acquisitions of most healthcare facilities and service providers. This likely kills the idea on a national level, where it was proposed by Sen. Ed Markey (D-Mass.) in response to the Steward debacle. Newsom is a top surrogate for Kamala Harris, and there's no way that a Trump administration would take up this mantle. The vetoed legislation would have required the AG to give written consent at least 90 days before transactions valued at $25 million or more.
The nation's nearly 3,000 nonprofit hospitals collected billions in tax breaks but paid less than half that amount in charity care to low-income patients. In exchange for not paying income, property, sales or other taxes, these hospitals are expected to provide free or reduced-cost care to low-income patients as well as other community benefits. A new study estimates the enormous size of this collective tax break. The study reported the nation's nearly 3,000 nonprofit hospitals were spared $37.4 billion in federal, state and local taxes in 2021, a reflection of how lucrative these tax benefits can be for medical centers. Medicare filings show hospitals paid out $15.2 billion in charity care in 2021.
Within a few days of one another, two teams of accountants released separate estimates on the value of nonprofit hospitals' tax exemptions. Their wildly different findings underscore the degree to which who's counting and what they count matters. The first, a JAMA study published Thursday, pegged that number at $37.4 billion. It factored in the value of forgone federal and state income taxes, sales tax, property tax, federal unemployment tax, charitable contributions from donors, and savings from issuing tax-exempt bonds. The second, the AHA's annual snapshot of how hospitals' federal tax exemption compares to the benefits they provide their communities, included just three of the categories JAMA studied. The lobbying group's final number: $13.2 billion.
The Age-Friendly Hospital Rating is a new structural measure included in the CMS 2025 IPPS Final Rule. This measure is designed to assess hospitals' commitment to delivering high-quality care to patients 65 and older. The rating focuses on five key domains: patient goals, medication management, frailty screening, social vulnerability, and leadership commitment. Hospitals must affirmatively attest to these domains to demonstrate their compliance with best practices for older adults. The implementation of this measure includes specific data collection and submission requirements, as outlined by CMS. Hospitals are required to submit data for the Age-Friendly Hospital Rating measure on an annual basis. The data submission is structured around the five domains, and hospitals must evaluate whether they meet the criteria for each domain fully to receive credit.
Vermont's hospitals are in trouble. A new analysis found that the state's hospitals would need as much as $3 billion in subsidies — from commercial insurance increases or taxpayers — to remain solvent over the next five years, if immediate steps aren't taken. That figure comes from a 142-page report outlining a plan to radically transform the state's health care delivery system to bring down costs while continuing to provide access to care. The report was mandated by statute and put together by the consulting firm Oliver Wyman, whose team conducted a series of meetings with thousands of patients, health care workers, hospital leaders and advocates over the past year. Some of the headwinds facing the state's costly health care system: Commercial insurance rates are some of the highest in the country, and have increased by double digits for three years in a row, far outpacing the national average. Most of the state's 14 hospitals are operating at a loss, and those losses are expected to worsen in the coming years. Vermont's population is aging and shrinking, which will put further strain on the health care system and workforce. Patients face long wait times for primary care and specialty care and have inadequate access to community based services, leading to expensive, sometimes unnecessary hospital visits. Low-income households in rural areas face some of the greatest barriers to accessing care, stemming from a lack of affordable housing, transportation, and culturally competent care.