Medicaid cuts force hospitals onto auction block

http://www.marketwatch.com/story/medicaid-cuts-force-hospitals-onto-auction-block-2011-08-04

LOS ANGELES (MarketWatch) — In Tennessee, a state where health care is king, hospital operator Catholic Health Partners has found that it can’t do business there anymore.

Tennessee is home to such giant hospital chains as HCA Holdings /quotes/zigman/1545475/quotes/nls/hca HCA -2.58% , Community Health Systems /quotes/zigman/261693/quotes/nls/cyh CYH -4.16% and LifePoint Hospitals /quotes/zigman/64443/quotes/nls/lpnt LPNT -1.47% . But aggressive Medicaid cuts by state politicians are eating into the bottom line at six Catholic Health Partners medical centers in Knoxville. So it’s selling the group of hospitals, says James Gravell, Cincinnati-based Catholic’s chief financial officer.

Catholic’s net margin already stands at a tenuous 2% to 2.5%, leaving little wiggle room, Gravell says. Most of its hospitals are centered in Ohio and serve such depressed Rust Belt cities as Youngstown and Toledo. Low Medicaid reimbursements already put a crimp in profits; its hospitals won’t make back costs on roughly 22% of its patients on average, and up to 30% in regions such as Toledo.

“When you’re a business and you see that, it’s a real challenge,” Gravell said. “We were not making money in Tennessee. We were losing money.”

Bob Dole, 1996.

the world wants to be just like you, delusional that you are the best.

Just examples of tweaks and adjustments that would only affect providers (and wouldn't end up affecting beneficiaries.) Right?

:sarcasm:

it will only get worse as money is squeezed out of the system.

In Massachusetts, they cut a lot of services for the poor. Stuff that can't be replaced.

In the end, this will cut capacity and people won't get treated because of delays. And whatever group buys these hospitals will cut certain services that are unprofitable.

I think that's a core problem.