A senior official at the Dallas-based corporation trying to buy community hospitals in Bristol, Vernon, Manchester and Waterbury says privatizing them is the best way to keep them viable, but employee representatives have major concerns about the potential buyouts.
Various stakeholders in the pending deals voiced their opinions to state lawmakers Thursday during a meeting of the newly formed bipartisan Roundtable on Hospitals and Healthcare.
Harold “Trip” Pilgrim, senior vice president of development at Tenet Healthcare Corp. told members of the roundtable that the company’s plan to buy several Connecticut hospitals – converting them from nonprofits into for-profit, privatized entities – is the best bet for preserving them.
Amid expensive mandates tied to the Affordable Care Act, additional money needed to upgrade information and technology systems and decreasing Medicaid reimbursements, “if you’re a small, independent community hospital you find yourself squeezed,” Pilgrim said.
“This is a trend that is playing out in communities across America,” he told lawmakers. “Independent community hospitals need to find ways to leverage economies of scale (and) have a more cost-efficient footprint” while still providing quality healthcare, he said.
Tenet’s acquisitions, he said, will ease the pressures the hospitals feel. The corporation’s size can, among other things, allow hospitals to take advantage of centralized human resources and information technology systems to cut costs, he said.
“We will bring capital access and sustainability for these organizations, without negating who or what they’ve represented to those (local) communities over history,” Pilgrim said.
Union officials who represent hospital workers aren’t so sure.
“There are serious questions about how this takeover would impact quality of care,” said Suzanne Haviland, field representative for AFSCME International, the union representing nurses and technical employees at Waterbury Hospital, which Tenet is in the process of acquiring.
“We believe that there needs to be significant protections in place” before the purchase is approved, she said.
Employees worry about Tenet’s reputation, she said. The company has paid Medicare-related fines of more than $1 billion over the past 12 years and has been sued for allegedly receiving Medicaid kickbacks, she said. “There’s been a lot of issues.”
She also said the company is anti-pension and employees worry about potential changes to future contracts.
Haviland also worries about Tenet’s “potential dominance” of Connecticut’s healthcare landscape. In addition to vying to buy hospitals in Waterbury, Manchester, Vernon and Bristol, Tenet has partnered with Yale New Haven Health System – though it has not bought Yale-New Haven Hospital – so if the pending deals go through, Tenet will have some sort of connection with about one-third of Connecticut hospitals, she said.
If Tenet keeps expanding and begins buying physicians’ practices in the state that could result in higher costs for patients, she warned. The same procedures administered by the same doctors can be billed at a more expensive rate if that doctor technically is an employee of a hospital, she said.
Pilgrim spoke earlier and had to leave the roundtable discussion early, to catch a flight, before the union officials spoke so he was unable to respond to their claims.
The privatization of hospitals is “deeply troubling,” said Deborah Chernoff, public policy director of the New England Health Care Employees Union District 1199, SEIU. The union represents 400 workers at Waterbury Hospital who work in nursing support roles and maintenance jobs.
“No one can serve two masters,” she said. “We need to be very careful every step of the way…lest we discover our hospitals have been converted from centers of care to cash cows for investors.”
Hospital employees worry that privatization will lead to layoffs and reduced work hours, she said.
Melodie Peters, president of the American Federation of Teachers Connecticut union that represents 700 workers in the Eastern Connecticut Health Network (ECHN), also spoke. Tenet is in the process of buying two ECHN hospitals, Rockville General Hospital in Vernon and Manchester Memorial Hospital.
“We do have some fears,” she said, though employees are hopeful that a private hospital can thrive with proper checks and balances and still retain its ties to the local community.
In his earlier comments, before the union officials spoke, Pilgrim said Tenet’s previous privatizations of hospitals have gone smoothly.
“My experience is those hospitals thrive after conversion,” he said.
State Rep. Whit Betts, R-Bristol, asked Pilgrim how privatization typically impacts employee turnover.
“Physician retention has been very good,” Pilgrim answered, citing turnover declines in Tenet-acquired hospitals in San Antonio, Detroit and Chicago.
Bristol Mayor Ken Cockayne and Manchester Mayor Jay Moran addressed the roundtable, both saying they support any measure that will keep their municipalities’ hospitals in town.
“The hospital is one of our biggest employers,” Cockayne said. “If this (privatization) is going to keep the hospital strong, then I fully support it.”
Moran agreed, saying his priority is to keep Manchester Memorial Hospital as his town’s largest employer.
“ECHN is not in a financial position to compete without new capital,” he said, adding that if privatization is the best solution “then we’re willing to accept the change.”
Tenet’s acquisition of the now tax-exempt Bristol General Hospital will add $1.5 million to $2 million to that city’s tax roll, Cockayne said. Manchester doesn’t yet know the tax impact a Tenet deal would have, Moran said.
The bipartisan Roundtable on Hospitals and Health Care was formed by the legislature earlier this year. The group is tasked with reaching out to policy makers, hospitals, physicians, health insurers, patient advocates and other stakeholders.
The group’s goal is to monitor the implementation of recent legislation, discuss the changing health care market and develop policy recommendations to ensure continued access to affordable quality care in the state.