Bayfront Medical Center is a St. Petersburg institution with a proud history of treating the poor and the uninsured as a not-for-profit hospital. So it is unsettling to contemplate Bayfront's move to join a for-profit hospital chain under investigation by the Department of Justice for the way it runs its emergency rooms. Bayfront officials and the St. Petersburg City Council, which must approve a new lease because the hospital sits on city-owned land, should ask more hard questions before deciding whether to go forward with the deal next spring.
Health Management Associates, which would buy an 80 percent interest in Bayfront, defends its record and pledges to continue Bayfront's commitment to serving the poor and uninsured. But those promises are at odds with Sunday's critical report on CBS's 60 Minutes that HMA has pressured doctors to admit a high number of emergency room patients to increase profits.
The news program interviewed more than 100 current and former employees of HMA, which owns 70 hospitals in 15 states — including 22 in Florida and three in the Tampa Bay area. Former HMA doctors and hospital officials described how their hospitals were pressured to admit as much as 20 percent of emergency room patients with little regard to their medical needs in an effort to make more money. For Medicare patients, one Pennsylvania doctor said, the benchmark was 50 percent. Alan Levine, HMA senior vice president and head of its Florida group, denied to 60 Minutes and to the Tampa Bay Times editorial board on Monday that there were any arbitrary quotas. But that sort of profit-driven atmosphere would not fit Bayfront Medical Center's mission.
Those were not the only revelations in the 60 Minutes report that should concern Mayor Bill Foster and City Council members. The report also recounted how an FBI veteran who worked for HMA auditing its hospitals concluded that four hospitals inappropriately billed Medicare and Medicaid for hundreds of thousands of dollars. He was eventually fired and has sued HMA. Levine said the accusations of Medicare fraud are inaccurate, talked of the hospital industry's larger complaints about federal policy regarding Medicare patient admissions, and said HMA is cooperating with the Justice Department's investigation.
It's understandable why Bayfront has spent two years exploring its options. Stand-alone nonprofit hospitals are becoming a rare breed, and Bayfront's operating profit was less than 1 percent last year. Whether the timing is right given the coming changes through the Affordable Care Act and whether HMA is the right fit is not as clear.
Bayfront CEO and president Sue Brody said Monday that HMA has been forthcoming about the allegations and the federal investigation. Bayfront officials will continue to ask questions and perform due diligence, but they said they see no reason to stop the deal. While Bayfront would become a for-profit hospital, an eight-member board would be divided evenly between HMA and a new Bayfront not-for-profit. Bayfront's current policy toward treating the poor and uninsured would be written into the purchase agreement. That's all good, but ultimately the for-profit chain with the 80 percent ownership stake will have the final say at an institution that has been locally controlled for more than a century.
Bayfront Medical Center is one of St. Petersburg's most precious assets. It employs 2,500 and provided $35 million in uncompensated charity care last year. Before signing off on any new ownership structure, Bayfront officials and the city should seek more answers about how HMA does business.