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Financial Report Shows Hospitals Continue to Post Record Profits in 2007 Approaching $500 Million in Second Qtr – A 35 % Increase Over 2006

During the Same Time Period, Poor RN Staffing Contributes to Thousands of Preventable Infections, Causing Patients to Suffer While Hospitals’ Coffers Grow

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CANTON, Mass.— At a time when patient safety is being increasingly endangered by RN understaffing, the state’s hospitals continue to post record profits of nearly a half billion dollars for the first six months of 2007 – a 35 percent increase over the previous year’s second quarter profits. If the trend continues, the hospital industry is poised to record its third straight year of profits in excess of $1 billion.

According to the numbers posted recently by the Massachusetts Department of Health Care Finance and Policy (View Report), total hospital profits for the second quarter were $499,289,579, compared to $368,329,000 for the same period in 2006. As overall hospital profits grew, the number of hospitals reporting losses continued to decline, with more than 86 percent of the hospitals making gains. Click here to view a spread sheet detailing hospital profits for the last three years.

“These profits are shocking given the fact that they come at the same time that the Department of Public Health (DPH) has issued a report showing that an estimated 2,000 Massachusetts patients a year die needlessly from preventable hospital-acquired infections, infections that recent scientific studies link to poor RN staffing in hospitals,” said John McCormack, a patient safety advocate and co-chair of the Coalition to Protect Massachusetts Patients, an alliance of 124 leading health care and consumer organizations supporting legislation to set safe RN staffing limits. “According to DPH, six patients are dying every day in Massachusetts because of hospital-acquired infections, This year’s hospital-industry profits could pay for the staffing needed to protect patients many times over, yet the safety of patients is being sacrificed to high industry profits and seven-figure CEO salaries.”

The bill, The Patient Safety Act (H. 2059) will dramatically improve care by setting a safe limit on the number of patients assigned to a nurse. The measure, which is co-sponsored by State Rep. Christine Canavan (D-Brockton) and Senator Marc Pacheco (D-Taunton), calls upon the Department of Public Health to set a safe limit on the number of patients a nurse is assigned at one time. In addition, the bill calls for staffing ratios to be adjusted based on patient needs. It also bans mandatory overtime, and includes initiatives to increase nursing faculty and nurse recruitment. During the last legislative session, the Massachusetts House of Representatives passed a similar bill by a vote of 133-20. A public hearing on the bill before the Joint Public Health Committee is scheduled for Oct. 24.

Not surprisingly, the biggest profit margins were recorded by the state’s major Boston teaching hospitals. Children’s Hospital topped the list, posting a whopping $69 million profit for the first half of the 2007 fiscal year; Beth Israel Deaconess ranked second with $41.5 million and Massachusetts General Hospital came in third with $40.1 million. Not far behind were the Lahey Clinic Hospital at $40 million, Dana Farber Cancer Center at $39.9 million and Brigham & Women’s Hospital at $34.1 million.

In Central Massachusetts, UMass Medical Center led the region with a $13.7 million profit followed by St. Vincent Hospital in Worcester at $12.6 million. In Western Mass. Baystate Medical Center in Springfield topped $35 million and on the North Shore, Northeast Health Systems (Beverly Hospital and Addison Gilbert in Gloucester) recorded profits of $12.7 million. In Southeastern Mass, Southcoast Health Systems (St. Luke’s in New Bedford, Charlton Memorial in Fall River and Tobey Hospital in Wareham) posted a $17.1 million profit followed by Sturdy Memorial in Attleboro at $13.6 million.

On the South Shore, Good Samaritan Medical Center in Brockton and South Shore Hospital in Weymouth both led the region with profits of $3.9 million for the first six months of the fiscal year.

The $1 billion profit margin comes at a time when the industry is in the midst of a massive building boom, with expansion projects totaling more than $500 million either completed or in the works. Hospital CEOs have also reaped significant benefits, with most earning high six-figure, and a number receiving seven-figure salaries.

McCormack says now is clearly the time to act. “These profits show that the resources are available to hospital administrators to improve RN staffing levels to comply with the Patient Safety Act so that nurses can provide the safe, quality care our patients deserve. Every day we wait for this bill is another day patients suffer and perhaps die from the hospital industry’s focus on profits at the expense of patient safety” While Profits and CEO Salaries Grow, Hospitals Refuse to Invest in Safer Nursing Care While the hospital industry has been making enormous profits and spending lavishly on new projects, the quality of patient care in Massachusetts hospitals has been deteriorating because registered nurses are being forced to care for too many patients at once. Instead of investing in better staffing to protect patients, the industry has responded by spending hundreds of thousands of dollars to defeat the Patient Safety Act. Between 2004 and 2006, when the industry’s profits doubled, a study of actual RN staffing levels in the state’s hospitals conducted by the Massachusetts Nurses Association and Andover Economic Evaluation found:

  • There was no statistically significant improvement in hospital staffing levels between 2004 and 2006.
  • More than half of the hospitals reported regularly assigning more than five patients per nurse and every hospital reported an assignment of more than four patients per nurse on the medical/surgical floor. A study in the Journal of the American Medical Association finds that for each patient over four assigned to an RN there is a 7 percent increase in risk of injury, harm and death to patients.
  • In a shocking 36 percent of observations, hospitals failed to meet the accepted minimum standard of no more than two patients per nurse in the intensive care unit, a standard recommended by the national Institute of Medicine.
  • Most alarming of all, more than 45 percent of hospitals had, on occasion, assigned eight patients or more to their nurses, a staffing level that, according to research published in the Journal of the American Medical Association, placed those patients at a 31 percent increased risk of death.

During this time period, the rate of life-threatening hospital acquired infections continued to increase, causing hospitals to spend between $200 –$ 499 million annually to treat them, according to the DPH report. A study published in the June issue of the journal Medical Care found that limiting nurses’ patient assignments could reduce these costly infections by as much as 68%.


P.O. Box 309 Canton Massachusetts 02021 617.522.3461