Emerson Hospital of Concord, MA is conducting an investigation into an accounting error that caused it to overstate its 2006 financial results. The disclosure comes as the hospital's finances appear to be deteriorating. It posted solid profit margins and surpluses in fiscal years 2004, 2005, and 2006. But in the nine months that ended last July, the hospital lost money providing healthcare and avoided losses only because of other income, such as profits on its investments.
University of Pittsburgh Medical Center's net profit dropped 70 percent in the first six months of this fiscal year. The decrease is due largely to a sizable drop in its investment income, a $10 million outlay to a city tuition program and depreciation costs from the system's many improvement projects. Officials representing the system, however, are asking that attention be paid to a measure of cash flow showing the nonprofit earning $260 million before interest expense, depreciation and amortization.
A California lawmaker has introduced legislation that would require health insurers to get permission from state regulators before retroactively canceling a member's coverage. Assemblyman Hector De La Torre said his bill would "protect the rights of insured Californians against unfair practices of insurance companies."
Facing a deficit, Los Angeles County healthcare officials have unveiled a cost-cutting plan that calls for closing all but one of the county's dozen clinics and reduces services at its six comprehensive outpatient health centers. The proposal would dramatically retreat from the county's longtime role in providing primary care to the indigent. The clinics and comprehensive centers get about 400,000 primary care visits a year, nearly two-thirds from uninsured patients.
The federal government is proposing cuts to the Medicare and Medicaid programs, so now hospital organizations are lobbying to legislators and warning of cutbacks if the cuts are approved. Pennsylvania and New Jersey hospitals estimate that the proposed budget would reduce payments to hospitals in the two states by $8.4 billion over five years. Almost 50 percent of New Jersey's hospitals are already in the red, and the cuts would drive more hospitals in the state into bankruptcy, according to representatives from teh New Jersey Hospital Association.
Healthways Inc. has announced that it expects its pilot program to determine whether disease management lowers the cost of treating patients with chronic illnesses to meet specified performance targets. The move questions conclusions by Medicare that had caused Healthways stock to plunge.