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This New York Times story on Thursday outlines the damage done to the reputation of Texas Health Presbyterian Hospital in Dallas as a result of its mistakes in dealing with Ebola patient Thomas Eric Duncan. The hospital, the Times reports, has now “hired Burson-Marsteller, the global public-relations firm, to help tell its side.”
It would be great to see a story detailing the advice Burson is giving the hospital — especially because hospitals, which rarely contend with a skeptical let alone hostile press, are terrible at dealing with the media. It would be even better to see stories that go beyond recording what is already a hospital apology tour clearly suggested by Burson.
Typically, hospitals are every community’s favorite charity — though they make exorbitant profits and often bill patients abusively. Thus, the Times reported:
Until three weeks ago, few questioned Presbyterian’s status. With nearly 900 beds and 1,000 doctors, it is the eighth-largest hospital in Texas and has excelled in delivering both cardiac care and babies…. It is the hospital of choice for some of the region’s richest and most prominent residents. The board chairwoman at the hospital’s parent company, Texas Health Resources, is Anne T. Bass, the wife of the billionaire investor Robert M. Bass.
But then the Times reported on some suits brought by patients alleging bad care in the hospital’s emergency room and that “the hospital’s most recent tax filings, from 2012, show that it had $613 million in revenue and $1.1 billion in net assets. The hospital’s president at the time was paid $1.1 million.”
The Times, however, missed some more important numbers that provide a fuller picture of what may be among the most successful businesses in northern Texas, such as:
–The hospital had an operating profit (revenue over expenses, with noncash depreciation added back) of $89 million. That’s a profit margin of 14.5 percent — amazing for a people-intense service business, let alone a supposed nonprofit.
–I’m sure Anne Bass and others in the Dallas community are charitable, but of that $613 million revenue, just $7.8 million, or 1.3 percent, came from contributions.
–Meantime, the hospital was still able to realize those profit margins while paying seven executives more than $600,000 each and three more than $1,000,000.
–That is still not the full picture. The Dallas hospital is a subsidiary of a 25-hospital system called Texas Health Resources (the client that retained Burson). This parent company had revenue of $3.7 billion in 2012, with operating income (excluding depreciation because it is not a cash expense) of $473 million. I counted 20 executives on the parent company’s tax form earning more than $600,000, with the highest earner topping out at $2,685,000.
Why am I laying out all these compensation numbers? Because any good reporter should want to put Burson and its new client to the test by asking how much of the large bonus portion in each compensation package is based on the executives’ attention to quality control.
So far, Burson seems to have encouraged hospital officials to end their early silence and engage with the press, and even to own up to their early mistakes. Burson obviously believes this will take some of the heat off.
It shouldn’t.
As with most hospitals, Texas Health Resources form 990 filing has a lot of high-sounding gobbledygook about how judiciously the compensation of its executives is determined. It cites its board’s retention of “independent” compensation consultants to determine, among other things, the metrics that should be used for its bonus plans.
I’ve found, however, that despite the way nonprofit hospitals and their boards like to refer to their mission in terms of providing quality care, even to those who cannot afford it, the metrics these boards typically set mostly — if not completely in some cases — have to do with two cold, hard business numbers: revenue and operating profit.
How, in fact, are the bonuses at Texas Health determined?
How much does the quality of the care — for which federal regulators now have multiple, comparative measures — count?
One of the most important of those measures has to do with the rate of infections contracted in the hospital. Is any executive’s compensation in any way based on that? Is there a separate board quality-control committee that monitors this aspect of the hospital’s performance?
Those questions should be followed by asking for specifics related to how often the hospital did drills for dealing with infectious diseases, who was in charge of those drills and how were they documented.
With the original mistake in mind — that Duncan, who obviously had no insurance, was sent home from the emergency room when he should have been admitted — any good reporter should ask if any policies or incentives were in place at the hospital to discourage potential nonpayers from being admitted.
If Burson and its client are in any way cagey about providing all documents and making available all officials and doctors related to this process and these policies, the reporter should find doctors or nurses who will provide the information, even if they will not allow their names to be used.
A hospital that, like most, has enjoyed a relatively easy ride in the media has now been thrust into the international spotlight in a horribly negative way. It’s time for the media not to record its apology and move on, but to look at this institution, and others like it, as the aggressive — and vitally important — businesses that they are.
This story, a regular feature, was originally published on Reuters.com.
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