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Hospitals are…

a) in desperate financial shape, on the verge of bankruptcy…

b) doing quite well thank you, enjoying very healthy profits…

c) both.

The answer is…C.

For-profits – HCA, Tenet et al are doing great, while (most/many) not-for-profits are really struggling, with some on the verge of/going into bankruptcy.


Very briefly, for-profits (there’s lots of nuance here, but generally);

  • don’t take Medicaid patients,
  • have very strong orthopedic and cardiac surgery practices which are very profitable;
  • do their best to avoid/transfer/not care for the uninsured.


  • include inner-city and rural facilities that must take Medicaid and
  • serve as primary care providers for the indigent and uninsured and
  • deliver lots of babies and provide general med/surgical services which are marginally profitable

What does this mean for you?

Hospitals of all types are looking to maximize revenue, especially from very profitable payer types.

Is that you?



2 thoughts on “Hospitals are…”

  1. Joe, this bifurcation of the hospital community speaks to what may be the underlying cause of high medical costs in the US. We have two systems of care – public (Medicaid, public healthcare system) and private (all the for profits and a share of the entrepreneurial non-profits).Were we to have just one model, that model would more carefully match demand and supply, would better self-discipine itself, would use borrowing more carefully. But we have two models which game against each other (least the for profits game) and therefore ultimate financial accountabiity is missing. I picked up this interpretation from an unlikely source — an analysis of why public transit construction costs are so high in the U.S.

    1. Thanks Peter – you hit on a major issue, the for-profit motivation to generate revenue and margin to pump stock prices and investor gains.
      I agree that is a big issue – I’d argue a major accelerant is the Supreme Court ruling on Citizens United and the impact on federal legislators and politics. Big Pharma, the AHA, huge payers and providers are buying influence which exacerbates the problem you identify.
      Until we get corporate and other big money out of politics I don’t see a solution.

      be well Joe

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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