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Contents © 1999
by Jim Holman.
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Catholic Healthcare for the Rich

POOR TAKE A HIT WHILE REVENUES RISE

By James McCoy

"Physician, heal thyself": that's the message of the Service Employees International Union (SEIU) to Catholic Healthcare West (CHW). The third largest Catholic healthcare system in the nation (and the largest in California) is taking in twice as much revenue as it did in 1992, while spending half as much for the poor -- this despite CHW's own avowed mission to "provide direct services to our sisters and brothers who are poor and disenfranchised...advocating for change of social structures which undermine human dignity, demonstrating special concern for the poor."

The potent message, dispensed in a May 1999 report called "Broken Promises," comes from an admittedly biased source: the Service Employees has been trying to unionize Catholic Healthcare West for more than a year now. "Absolutely workers are organizing;" said union spokeswoman Lisa Hubbard, "that doesn't change the fact."

The fact is, Catholic Healthcare West's revenues climbed from about $1.5 billion seven years ago to about $3.5 billion last year (see chart 1). Meanwhile, that Catholic healthcare system's charity spending dropped from 2 percent to 1 percent (see chart 2).

So while its revenues more than doubled, Catholic Healthcare West cut its spending on charity cases in half?

"Yep," said Carolina Briones, an analyst for the Service Employees. This at a time when the number of uninsured in Los Angeles county skyrocketed to 32 percent (80 percent among Latino children, according to county health statistics), and other nonprofit hospitals boosted their charity care spending an average of 15 percent statewide (see chart 3).

Since healthcare systems can differ vastly in size and number of patients served, "the best comparative measure is as a percent," Briones said; that's why yardsticks such as "charity care as a percent of net patient revenue" are a healthcare industry standard. According to that measure, Catholic Healthcare West's charity has grown cold in comparison with other Catholic healthcare systems as well, which in 1997 spent about three percent to Catholic Healthcare's one percent (see chart 4).

Briones brushed off the difficulty of assembling this damning data: Catholic Healthcare West is "one of the largest borrowers of tax-exempt bonds in the state," she said, "and part of its bonds statement contains its financial information." Fred Sohl, a spokesman for St. Vincent Medical Center, one of the Los Angeles hospitals included in Catholic Healthcare West's 48-hospital system, first promised that he would find an expert to rebut specific allegations in the union report, but then failed to reply to my repeated phone calls. Perhaps he was too busy, as Service Employee members were picketing in front of the hospital to call attention to the report. His office did find time to fire off a statement from William Parente, president of St. Vincent's, who said "in the report, the SEIU, which has spent millions of dollars trying to organize CHW employees, grossly manipulates charity care data in order to build support for its organizing campaign....

"The truth is that...CHW has maintained its commitment to meeting the healthcare needs of the poor and under-served," Parente went on. "In the fiscal year ending June 30, 1998, CHW provided quantifiable benefit to the community totaling $177 million.... In addition, over the past several years, CHW has allocated over $8 million in grants to local non-profit organizations that offer community health prevention and intervention efforts. CHW has also invested over $22 million during the past seven years to help finance local programs aimed at increasing access to jobs, housing, education and healthcare for people in low income communities."

I called the spokeswoman for the southern California region of CHW, Joyce Hawthorne, asking her to respond to the SEIU report, but she too dodged the bullet. "Their charts are wrong, and the way they conducted the survey is wrong, the whole data is wrong," she said. When I asked her to zoom in on where exactly it was wrong, however, she told me that she had no time; she had a meeting in a couple of minutes.

-- from the Los Angeles Lay Catholic Mission, July/August 1999

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