COLUMBIA/HCA: Bolsters Claims Of Charity Care In Wake Of Alexian Swap
Columbia/HCA Healthcare Corp. "is going on the offensive to quell opposition to its proposed takeover" of San Jose-based Alexian Brothers Hospital. Opponents charge the deal will threaten charity care in the area, but Columbia is taking steps to assuage opponents' skepticism. The health care giant "has compiled statistics" that bolster its claims that charity care will enjoy the same priority as it did with not-for-profit Alexian, and has enlisted pubic affairs firm Burson-Marsteller "to help plead its case to the community." Citing Columbia's acquisition of not-for-profit Good Samaritan Health System in 1996 as proof of Columbia's commitment to the poor, officials insisted that "San Jose residents have fared better than ever since Columbia took over the Good Sam hospitals." While Paul Estess, director of business development for Columbia's San Jose Medical Center, conceded that "charity care ... dropped substantially after the hospital conversion, from nearly $2.9 million in 1995 to just $1 million in 1996," he pointed out that the figures merely reflect accounting conventions, not the amount of care the hospital provides free of charge. The facilities actually provided more than $28 million of uncompensated care -- charity care and free treatment to people with bad debt -- in 1997, "up from $19 million in 1995, the year before the sale." A May report compiled by a Virginia health policy organization, Project Hope, agreed, finding that "the Good Samaritan System provided the same amount of uncompensated care after the conversion" (Delevett, San Jose Business Journal, 12/14 issue).
Acquisition opponents, however, will not be easily appeased and are calling for Alexian Brothers to create a charitable trust to continue to serve the community. The Good Samaritan transaction required the establishment of such a trust. Alexian has indicated that it will provide "a significant grant" to alleviate the pinch, but some are still unsatisfied. Dennis Haggerty of the People Acting in Community Together group "said the dollar figure he's heard the brothers are offering is 'disappointingly low'" (Delevett, San Jose Business Journal, 12/14 issue).