KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Nashville Hospitals Cut Costs To Keep Up Revenues, Despite Fewer Patients

News outlets report on hospital issues in the Nashville area and San Francisco.

"Over the past year and a half, keeping costs in check has helped the large hospital chains based in the Nashville area to increase quarterly earnings, even when seeing fewer patients come through their doors," The Tennessean reports. "The recent second quarter was no different. Cost controls fueled an 18 percent increase in net income at Franklin-based Community Health Systems, despite a decline in the number of patients. HCA Inc. saw fewer inpatient visits, and higher interest expense kept its pre-tax profits flat. But the Nashville-based industry leader reported an increase in overall volumes, including outpatient visits and improvements in its operating margins."

Analyst Sheryl R. Skolnick of CRT Capital in Stamford, Conn., said that the earnings report suggests "the pressure on hospitals' volumes from economic headwinds has increased. That puts more pressure on the chains to find additional ways to reduce costs, having already used most of the easier cost-reduction measures" (Ward, 7/30).

The New York Times, on St Luke's hospital in San Francisco's Mission district: "The hospital is run down and lacks air conditioning. It is licensed to support 229 beds, but on an average day just 130 are filled.  … California Pacific Medical Center, which operates St. Luke's, once planned to shutter the 139-year-old hospital and turn it into an outpatient facility. But California Pacific - a not-for-profit affiliate of Sutter Health, a Northern California hospital network - is keeping St. Luke's open, using it as a bargaining chip in an ambitious strategy to overhaul how it offers medical care in San Francisco. … The center's plan has led to a fierce debate about where hospitals should be located in San Francisco, and about whether California Pacific's strategy to consolidate many services at one primary location would ultimately limit services for patients now served by hospitals like St. Luke's, where almost 90 percent of all patients are on Medi-Cal or Medicare" (Mieszkowski, 7/29).

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