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HEALTHCARE
NEWS
Key West Commissioner: CHS Hospital's Profit Margin
is 'Obscene and Unconscionable'
By Ayla Ellison
K
ey West, Fla., commissioners are con-
cerned about the high prices patients
face at Lower Keys Medical Center in
Key West, which is part of Franklin, Tenn.-
based Community Health Systems. However,
hospital officials say improving patient care is
the top priority, not lowering prices, accord-
ing to Konk Life.
LKMC and Key West officials have had a con-
tentious relationship since last year when city
commissioners voted to explore reverting the
hospital back to public ownership aer hundreds
of patients complained of aggressive billing prac-
tices and poor care quality at the hospital.
In December 2016, Lower Florida Keys Hos-
pital District Board Chairman John Padget
sent a letter to CHS CEO Wayne Smith, ask-
ing if the hospital operator would consider
breaking its lease of LKMC early, as CHS'
30-year lease of LKMC doesn't expire until
2030. CHS responded in January, saying it
has no intentions to terminate the lease early.
Although the issue over the lease has been
settled, Key West commissioners' concerns
over the hospital's prices have not abated.
At a March 21 commission meeting, LKMC's
former CEO Steve Pennington said the hos-
pital hired an outside consultant to examine
the hospital's prices. Mr. Pennington said
the consultant determined LKMC's inpa-
tient charges are "in the middle of the pack
compared with South Florida hospitals," ac-
cording to Konk Life. e consultant found
LKMC's emergency room charges were lower
than its peers and its imaging charges were
higher. Although Mr. Pennington said the
hospital was working to reduce its imaging
charges, Key West Commissioner Richard
Payne said the hospital needs to do more to
lower costs, pointing out that CHS recorded
a 32 percent profit margin on LKMC in 2015.
"Your hospital has a monopoly. You're 50
miles away from your nearest competitor,"
Mr. Payne said, according to the report. "A
32 percent profit [margin] when the national
average is 7 percent is obscene and uncon-
scionable."
Other commissioners agreed with Mr. Payne,
saying lowering charges is critical. However,
Mr. Pennington said the hospital is more con-
cerned with patient care.
"We think if we provide high patient satisfac-
tion and invest in the hospital properly, the
profit margins will be where they will. at's
not something we should be penalized for or
[praised] for either way," said Mr. Penning-
ton, according to the report.
CHS did not immediately respond to Beck-
er's request for comment. n
Arizona Hospital Falls Into
Bankruptcy Less Than 2 Years
After Opening
By Ayla Ellison
Green Valley (Ariz.) Hospital is filing for Chapter 11 bankruptcy
less than two years after it opened.
Green Valley CEO John Matuska told the Arizona Daily Star the
49-bed for-profit hospital is filing for bankruptcy to strengthen
its financials. "This is merely a procedural step, and to be sus-
tainable we have to take this step to reorganize our finances and
alleviate some of our debt burden," he said.
The hospital will operate as normal during the bankruptcy pro-
cess and no layoffs are expected, according to the report.
Green Valley Hospital's financial troubles stem from several
sources, including loans with high fees and interest rates it can-
not afford and an annual $600,000 levy to fund Medicaid expan-
sion in Arizona. State officials intended for the expanded Med-
icaid program to lower hospitals' bad debt levels, which would
partially offset the assessment on hospitals. However, less than
10 percent of Green Valley Hospital's patients are on Medicaid,
making the fee a financial burden, according to the report.
Mr. Matuska, who has served as CEO of Green Valley since Oc-
tober 2016, expects the bankruptcy process to take about six
Banner Health Issues
Another Round of Layoffs as
it Restructures Operations
By Ayla Ellison
P
hoenix-based Banner Health is laying off more
employees, including its top public relations
executive, as it restructures operations, accord-
ing to the Phoenix Business Journal.
Banner first announced its restructuring efforts in
February. The system said it wants to become more
consumer-focused through the restructuring pro-
cess, which involves changes to its leadership struc-
ture. In February, Banner eliminated some leader-
ship positions.
This week, Banner issued a second round of layoffs,
which includes the system's Vice President of Public
Relations Bill Byron, according to the report.
Because some of the employees affected by the lay-
offs may fill other positions within the system, it isn't
possible to know the exact number of employees
impacted by the job cuts, Jennifer Ruble, senior di-
rector of public relations at Banner, told the Phoenix
Business Journal. n
