The financial results of 1951 operations at the 4 hospitals are presented in a consolidated statement, with departmental expenses and earnings itemized. Hospital activities reached a new peak in Akron in 1951. More patients were handled than ever before, keeping occupancy near the capacity level. Earnings and income, aided by increases in rates, consequently rose to new all-time highs. The picture presented by the combined operating statement shows a healthy financial condition at the end of the year. Higher rates established last fall offset increases in wages and other costs and enabled each of the four hospitals to finish the year in the black. * Balancing the budget with something left over for improvements is the goal of every hospital administrator. Akron's 4 big hospitals did this nicely in 1951. Rising costs can change the picture in 1952. Turning to the operating statement, it will be noted that gross earnings of $8,086,666 consisted of $3,694,244 earned by special hospital services and $4,392,422 from board and room charges. After deducting operating expenses of $6,885,341 the hospitals had left $1,201,321. If every patient had paid his bill in full, if special rates had not been granted as courtesies and for welfare, relief, and other special patients, that $1,201,321 would have been all gain. But deductions of $244,303 for bad debts, $68,643 for courtesy allowances, and $415,174 in adjustments for lower rates charged for relief, welfare, and other special patients-a total of $728,120-reduced the balance of $1,201,321 to $473,201. Bad debts are a part of hospital operations just as they are in any business. They are incurred by patients who cannot qualify for assistance as charity or welfare patients but who cannot manage to meet their obligations by their own means. A heavier load borne by the private patient results from losses incurred by the hospitals in caring for charity and welfare patients at less than cost. City and county patients and those coming under the care of the Community Chest make up the largest total in this class enjoying special rates. The 4 hospitals in 1951 made adjustments of this nature of $144,830 for the city of Akron, $37,517 for Summit County, and $65,665 for the Central Hospital Bureau, the Community Chest agency responsible for welfare patients. Other government and welfare agencies were given similar discounts. Courtesy allowances or discounts are given to hospital employees, members of the medical profession, and others. Next comes two miscellaneous items, $96.140 of nonoperating income from such sources as endowments, coffeeshop operations, and donations, and $2,289 of miscellaneous nonoperating expense, including cost of coffeeshop operations, interest on loans, building fund campaign expense, etc. Adding the miscellaneous income and deducting miscellaneous expense, there is left a balance of $487,052 of net operating income. Out of that balance the 4 hospitals spent, or reserved for expenditure, $271,155 for capital investment. That left a net gain of $215,897, or 2.6 percent on the year's gross earnings. Averaged over all the days spent in the 4 hospitals by inpatients, the net gain of $215,897 amounted to 61 cents for each day of stay in the hospital. On the expense side, administrative costs totaling $679,425 equaled 9.9 percent of all operating expenses. Cost of food and salaries of those who prepared and served it amounted to $1,204,201, or 17.5 percent of all operating costs. House and property expenses of $1,392,000 accounted for 20.2 percent of the total. Under this heading are the laundry, textiles (sheets, towels, etc.), housekeeping, plant operation (heat, light, and water), repairs and maintenance, and replacements and improvements. Last and largest expense items are the professional services. These services cost $3,609,719, or 52.4 percent of all operating costs. Under professional services the hospitals list medical and surgical costs, in cluding salaries of interns and resident physicians; cost of nursing service and education; and all special service departments such as X-ray, pharmacy, laboratory, etc. Operating figures do not supply all the testimony to the big proportions of the A consolidation of assets at December 31, 1951, reveals a grand total of Cash, $426,463; accounts receivable, $762,308; inventory of supplies, $287,429; Add to the total another $2,500,000 from collection of building fund pledges Hospital operating statement for 1951, 4 hospitals-Children's, Peoples, City, CLAIM PATIENTS RECEIVE LESS CARE THAN FORMERLY, DESPITE HIGHER COSTS (By Seward Sheldon) Big hospital bills are the major complaint about Akron hospital operations, but a long list of others was revealed in the Beacon Journal survey. Investigation substantiates some of these complaints, others appear to be based upon unusual individual experiences and do not apply generally. Heading the list of these additional complaints is the charge that patients get less care than formerly, despite the fact that hospitals have more professional employees per patient than ever before and the patient is paying the highest price in history for hospital care. Also, the critics charge that Akron hospitals: Enter into collusion to establish rates. Are operated inefficiently and wastefully. Have failed to increase the wages of low-paid workers in proportion to increases granted in the higher brackets. Accepted patients for diagnostic examination in violation of the Blue Cross contract. Dominate Blue Cross, putting themselves in the position of self-dealing. Are too hard boiled in requiring financial arrangements for bills before admitting patients. The charge that Akron hospitals enter into collusion in the establishment of hospital rates is true to the extent that the question is discussed in the Akron Hospital Council and agreement reached in fixing the time for rate increases. As one hospital trustee said, agreeing upon a date for increasing hospital rates is about the only thing Akron hospitals do in concert. The fact that rates among the four major hospitals here vary considerably indicates that individual hospital rates are not actually set by agreement. The charge that Akron hospitals are wasteful and inefficient in their operations is difficult to argue because of the lack of definite yardsticks of efficiency in the hospital field. One critic-a doctor-stated the charge as follows: "Competition among the hospitals in providing fine appointments, the latest in equipment, and many unnecessary frills, are among the chief reasons for high hospital costs. "Since they are spending the public's money, the hospitals are not interested in keeping down costs. I think it is an ascertainable fact that the hospital administrator who would attempt to cut costs or show a big balance at he end of the year would be very unpopular with his administrator colleagues. I think he gets more credit if he operates at a loss. "I am informed that when, as the end of the year approaches, there is indication of a balance, the common practice is to initiate improvements or buy new equipment, often not urgently needed, in order at the end of the year without showing a gain. "Do you know of any hospital that operates on less than it did in the preceding year? It just isn't supposed to be done. The incentive to save is entirely lacking." Mr. DOLLIVER. This question is a collateral one. It is in connection with some large corporations which years ago erected their own hospitals for the benefit of their employees. To be specific, I am thinking of the Tennessee Coal, Iron & Railroad Co. in Birmingham, Ala. I know personally that a number of years ago, the TCI did have a hospital and medical care program in the area around Birmingham. What has become of that? Is there anyone here who can give me any information about that? Mr. EDELMAN. I will ask Mr. Greenberg to come forward. Mr. DOLLIVER. I would like to know what has happened. Mr. EDELMAN. Could I introduce to this committee Mr. John Tomayko and Mr. Bernard Greenberg who are the technicians for the United Steelworkers and who have complete data on points of this type. STATEMENTS OF BERNARD GREENBERG AND JOHN TOMAYKO, REPRESENTATIVES AMERICA, CIO OF THE UNITED STEELWORKERS OF Mr. TOMAYKO. I might say that after 1950 when we negotiated this insurance program with the United States Steel Corp. we felt that this program was supposed to be in substitution for any existing health programs that the corporation may have offered to its employees. We had a clause within our contract which said that any benefits beyond this program shall be mutually agreed to between the corporation and the union. So, since the corporation in some fashion subsidized a hospital program for the TCI employees in what was then known as the Lloyd Nolan Hospital, we felt that they should discuss with us the contributions that they asked from the people for participation in this hospital and also, to some extent, the benefits that were provided to them. Rather than do that, the corporation gave the hospital away. They created what they called the Lloyd Nolan Foundation and they named three directors of this foundation which were the current Dr. Robinson, who is the present administrator of the hospital, and two other businessmen from the locality. In addition to giving the hospital away to this foundation, they gave them a grant of $750,000 rather than deal with our union on this question of this particular hospital. Since that time, however, our union through the local unions in the Birmingham area have met with Dr. Robinson, who is now the head of the foundation, and we have worked out a sort of a subsidy program to our regular insurance program with the United States Steel Corp. Our people in the Birmingham area do make a contribution and do get certain benefits. We have made a little progress in dealing with Dr. Robinson and, as you understand, that hospital is a group of doctors who work on a salaried basis. We have made certain limited benefits available to our people down there through negotiations with Dr. Robinson. We have not formally put them in writing, however, and we are making a monthly contribution and approximately 20,000 of our members do participate in the plan offered by the Lloyd Nolan Foundation. Mr. DOLLIVER. You have, of course, a contract with United States Steel, and the steelworkers union has a contract with the United States Steel Corp. That provides for health benefits, I assume? Mr. TOMAYKO. That is right. Mr. DOLLIVER. Do you insure that with an outside concern? Mr. TOMAYKO. Oh, yes. Our life insurance and sickness and accident provisions are insured under the Equitable Life Assurance Society and our hospitalization and our surgical is insured through Blue Shield hospitalization and hospitalization is insured through the Blue Cross. Mr. DOLLIVER. Suppose one of your union members would need hospital facilities in the Birmingham area. Could he use this hospital ? Mr. TOMAYKO. Yes, we have an arrangement that ties in our regular program with the Lloyd Nolan program. The Lloyd Nolan program goes a little beyond those benefits provided. The benefits provided by the Lloyd Nolan program now are completely financed by our people and the corporation no longer bears any portion of the cost. Mr. EDELMAN. Might I just suggest as a point of interest in this discussion the question to these representatives of the steelworkers that is it not a fact that in their negotiations with Blue Cross, I believe, for the first time, as a matter of historical interest, that a national contract was negotiated? Up until the present one, or up to that time, no industrywide or nationwide blanket contract with Blue Cross was possible. For instance, unions like mine or Mr. Childs are under the necessity of negotiating a wide variety of contracts and a wide variety of districts with varying benefits in each instance and the necessity of very complex local negotiations. I think the steelworkers have made an unusual contribution in that they have succeeded in getting a standard type of contract with Blue Cross which I think simplifies the administrative problems of the unions enormously. I think that ultimately it will certainly add to the service to the individual. I would think that a brief comment to that point by these representatives would be helpful here. Mr. DOLLIVER. I am very glad you brought that up and doubtless it sets a pattern for other nationwide unions to follow if they find it possible to do so. To sum this up, the point that perhaps is of interest to the committee and to the public, generally, is that these facilities which have been in existence for so long a time are not being abandoned, but they are still being used to a considerable degree through the mutual agreements of the management and the workers. Mr. TOMAYKO. However, I think I should point out that the corporation, and I am referring to the United States Steel Corp. now, denies having any connection whatsoever with the Lloyd Nolan Hospital. It supposedly is given away and it is now operated by the Lloyd Nolan Foundation. |