Removing investor-owned hospitals is not a bail out– it’s the right thing to do.

Removing investor-owned hospitals is not a bail out-- it’s the right thing to do.

By Kay Tillow for HOPE

Rep. Pramila Jayapal has been re-writing HR 676, the model improved Medicare for all legislation that has united and advanced a growing single payer movement since it was introduced into Congress in 2003.  HR 676 is evidence-based and written to enact the Physicians Proposal for a National Health Program.  

Unless the movement acts quickly to assure HR 676’s ban on for-profit institutions is maintained, Jayapal’s new bill will remove this vital section of HR 676.

It’s a compromise that there is no need to make.  We are getting hearings in this Congress.  Why should we take the impact of the for-profits out of the discussion before the debate starts?  We gain nothing.  The ban on for-profits has been in HR 676 since the beginning.  It did not stop 124 congresspersons from signing on to it.  It did not stop unions, organizations, cities, counties, and many others from endorsing it.  It was one of the popular provisions that all of those who have dealt with these for-profit hustlers welcomed.

HR 676 included in Section 103 the following:  

No institution may be a participating provider unless it is a public or not-for-profit institution.  Private physicians, private clinics, and private health care providers shall continue to operate as private entities, but are prohibited from being investor owned.

And

“For-profit providers of care opting to participate shall be required to convert to not-for-profit status.”1

That was placed in HR 676 for good reason.  Physicians for a National Health Program states in their proposal that “…because investor ownership of health care providers is known to compromise quality and divert funds from clinical care to overhead and profits the NHP (National Health Program) would not include such providers.”2

The consequences of for-profit institutions in health care are stark—even deadly.  In a review by researchers involving 15 observational studies of 26,000 hospitals and 38 million patients by Devereaux et al, the writers stated:  “Our pooled analysis of the adult population studies demonstrated that private for-profit hospitals were associated with a statistically significant increase in the risk of death.3

In the United States, said co-author Dr. Holger Schönemann, assistant professor at the University of Buffalo, a 2% increased risk means that 14,000 people die each year at for-profit hospitals who would have lived if treated at non-profit hospitals.4

Preventing the deaths of 14,000 people a year is a pretty good reason to take a stand on this rather than write it off as a minor detail.

According to CMS, for-profit nursing homes are cited for quality deficiencies 28 percent more often than non-profits, and for deficiencies that place residents in immediate jeopardy 53 percent more frequently,5 say health policy experts Drs. Steffie Woolhandler and David Himmelstein.

For-profit hospitals spend less on nurses and other clinical aspects of care, but more on administration and financial management; for-profit chains have often been cited for questionable business practices and have been repeatedly implicated in large scale fraud,”6 assert Woolhandler and Himmelstein.

The evidence is overwhelming.  So why would the ban on for-profit institutions in HR 676 be removed in the rewriting?

Some mistakenly say they don’t want to remove the for-profits because they don’t want to “bail out” those giant corporations.  But this is not a bail out.  A bail out is a situation in which the government uses public money to save a corporation or industry from failing.7

Hospital Corporation of America (HCA) and Tenet are far from failing.  In the first quarter of 2018 HCA saw their profits double to $1.1 billion.8

In the same quarter, Tenet reported a surprise $99 million profit after expanding a cost-cutting plan.9

Florida’s new Senator Rick Scott walked away (scot free) from the charges that his Columbia/HCA hospital corporation defrauded Medicare by paying only $1.7 billion dollars in fines and using the rest of the ill-gotten gains to promote his successful political career.10 

These giants don’t want to be bought out.  They want to stay in the system for the massive profits they make.  It is not a bail out when HR 676 converts them to non-profit so that their facilities can be used for the benefit of patients.11

Some assert that paying compensation for the hospitals will cost too much.  It will save lives and even money in the long run and is totally affordable by the use of 15 year bonds as set forth in HR 676.12

Taking out the ban on for-profit hospitals will not make our single payer legislation any easier to pass, yet it removes from the discussion the extremely important issue of what profits do to a health care system, to patients, to the costs.  Taking the discussion of profits in health care off the table will deprive the nation of the ability to debate the issue in the upcoming fight.

Some assert that Rep. Jayapal is going to leave the for-profits in the system but somehow regulate them.  Our system would then be burdened by the massive administrative task of trying to rein in the giants.  And it won’t work.  Single payer is supposed to simplify administration so that we can use those wasted funds for expansion of care.

If the for-profits are in, they will make profits and they will harm patients, and they will cost all of us.

Don’t weaken the bill before we get started.  Call Rep. Jayapal and ask her to put patients before profits and keep the ban on for-profit institutions in her Medicare for All bill.

Her number is Phone: 202-225-3106.


1.  https://www.congress.gov/bill/115th-congress/house-bill/676/text?q={%22search%22%3A[%22hr+676%22]}&r=1

2.  http://pnhp.org/beyond_aca/Physicians_Proposal.pdf

3.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC111211/

4.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1123315/

5.  https://www.healthaffairs.org/do/10.1377/hblog20181116.732860/full/

6.  https://www.healthaffairs.org/do/10.1377/hblog20181116.732860/full/

7.  https://dictionary.cambridge.org/us/dictionary/english/government-bailout

8.  https://www.beckershospitalreview.com/finance/hca-sees-quarterly-profit-nearly-double-to-1-1b.html

9.  https://www.beckershospitalreview.com/finance/tenet-posts-surprise-99m-profit-after-expanding-cost-cutting-plan.html

10.  http://politicalcorrection.org/blog/200906240003

11.  https://www.healthaffairs.org/do/10.1377/hblog20181116.732860/full/

12.  https://www.healthaffairs.org/do/10.1377/hblog20181116.732860/full/

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