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Where was the hospital competition/expansion angle in story of hospital job cuts?

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This week, the Twin Cities’ two major newspapers reported – in varying but incomplete ways – an announcement from Children’s Hospitals and Clinics of Minnesota that it planned to cut up to 250 jobs by mid November.

The Pioneer Press beat its larger crosstown competitor, the Star Tribune, by at least doing some original reporting on the story.

Here’s a strength of the story:

“The changes announced this week, (a hospital spokesman) said, stem from more fundamental, long-term challenges facing the hospital. First and foremost, he said, is diminished revenue from the state-federal Medicaid health insurance program.

“We’ve seen a significant increase in the number of kids relying on Medicaid, and at the same time huge cuts in Medicaid reimbursement,” (a hospital spokesman) said.

In the past year, the share of patients at Children’s covered by Medicaid has grown from 38 percent to 44 percent.

Hospitals have had a long-standing concern that Medicaid pays too little for hospital services, said Schindler of the Minnesota Hospital Association. The issue hits especially hard at Children’s because it has such a large number of Medicaid patients — the health insurance program typically covers only about 9 percent to 10 percent of patients at most other hospitals in the state, Schindler said.

Medicaid reimbursement rates have been declining each of the past several years, he said, although recent cuts haven’t been dramatic.”

That’s a very important issue – one that is probably under-reported about pressures facing children’s hospitals across the country.

But here’s a weakness of the story:

“The hospital said a one-day strike by nurses in June, the planned but averted nursing strike in July and the slow economy were factors.

“The net result was a 2.3 percent decline in total revenue equal to $3.2 million,” the hospital reported. “The decline in revenue coupled with increased operating expenses and expenses related to the nursing work stoppage resulted in an operating loss of $7.3 million.”

Lucas, the hospital spokesman, stressed that one-time factors related to the labor dispute with nurses aren’t driving the changes announced this week. The decline in admissions during the quarter was one such event, he said, adding that the hospital had to “ramp down our volumes in anticipation to be sure we were adequately staffed to meet patient needs.”

Well, wait a minute: How much of a factor was the nursing issue? The story never explains and, in our view, only confuses the issue.

IMG_0468.JPG The story also never commented on the hospital’s expensive expansion, arguably the clearest manifestation of its competition with Fairview University medical center, which has also built a new children’s facility (pictured at left in a photo taken last summer). We’ve written about this before, and how the Twin Cities may lead the nation in the number of different, separately-operated, competing children’s hospitals it now has.

But the limited Pioneer Press story nonetheless still showed up the state’s #1 newspaper, the Star Tribune, which only managed to rewrite and republish an Associated Press story, which ran only 123 words and was put in a little corner of page B4 in the Metro section.


Local citizens deserve much more scrutiny of the local hospital industry than that.

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Monte Wound

August 27, 2010 at 2:59 pm

I agree. A hospital near us just closed their birthing center, cut wages, and raised their own health-care costs, while at the same time building a brand new facility, then leaving the old one empty but with all the utilities on.