By Peter H. Lewis and Barbara Durr | December 9, 2020
For a hospital system organized as a not-for-profit charity, Mission Health made a lot of profits.
The money left over after Asheville-based Mission subtracted its expenses from its revenue — what would be called profit at a for-profit hospital — grew year after year, right up to 2018, when Mission’s directors surprised nearly everyone by announcing plans to sell out to Tennessee-based HCA Healthcare, the nation’s biggest chain of for-profit hospitals.
Mission at the time was as strong financially as it had ever been, which Mission’s executives said made it the perfect time to sell. They cited trends and studies suggesting that the Mission system faced a bleak future of relentless cost-cutting.
The cost-cutting apparently didn’t include the paychecks of Mission executives, which grew for years untouched by the financial scalpel.
Tax records examined by Asheville Watchdog reveal that in the decade leading up to the $1.5 billion sale of Asheville’s community-owned hospital system, a steadily increasing amount of Mission’s revenue went to salaries and bonuses for an increasingly crowded suite of non-clinical executives.
The records show:
Mission’s president and chief executive officer, Dr. Ronald Paulus, received more than $4 million in total compensation in the final four months he worked at Mission, before he resigned to accept a strategic consulting job with HCA, the terms of which remain secret. The amount he received from Mission included more than $1.1 million in bonus and incentives, plus accelerated payouts of all deferred compensation accounts that normally would have been paid out over several years.
Paulus was paid $2,460,723, including a $500,000 bonus, in 2018, the last full year of Mission’s independence.
Mission’s other executives did well under Paulus. The 24 highest-paid employees each received at least $330,000 a year in salary and bonuses, according to Mission’s tax filing for the fiscal year ending in 2018. Fourteen were paid more than $500,000.
Women outnumbered men — 13 of those 24 top-paid employees — but averaged $566,308 in compensation compared to $765,545 for the men. Dr. Jill Hoggard Green, Mission Health’s chief operating officer, was the highest paid woman at $1.25 million.
Of the 25 highest-compensated employees listed on Mission Health’s final tax filing, 20 received “bonus and incentive” payments of more than $100,000 each. The filing covers the period just before and after Mission changed hands.
Overall, executive pay for the top five executives at Mission Health more than doubled during Paulus’s eight-year tenure, outpacing pay increases for physicians, surgeons, nurses, and other clinical workers. Only six executives were listed as “highly compensated” on Mission’s 2011 tax return. By 2018, there were 25.
“Acceptable” Operating Margins
Unlike for-profit healthcare companies like HCA, which can sweeten executive compensation using stock options and outside investor money, all the money that nonprofit Mission Health paid to its top executives came out of revenue, reducing the money left over to reinvest in the healthcare system.
This is Part 3 of Asheville Watchdog’s Mission Series. Part 1, “A Done Deal: How Mission Health Wooed HCA” is here. Part 2, “Mission Sale: Good for WNC, or Just HCA?” is here.
Even as executive pay ballooned at Mission, Paulus told The Washington Post in 2018 that Mission had to cut costs $50 million to $80 million in each of the previous four years to preserve an “acceptable operating margin.”
Operating margin is a measure of financial performance directly tied to how much money the hospital system makes from patient care and related clinical operations. Growth in operating margins is one measure used to establish executive compensation.
To preserve those margins, Mission’s executive leadership demanded that some physicians and surgeons accept significantly lower fees, leading many long-time care providers to quit the Mission system. The executives also demanded concessions from nurses, and reduced staffing levels.
In one effort to increase margins, Paulus and other Mission executives attempted to force Blue Cross and Blue Shield of North Carolina to pay higher reimbursements, but the tactic backfired, instead forcing most of Mission’s insured patients to pay higher out-of-network co-payments for months before Mission ultimately backed down.
Raises for nurses measured in pennies
In 2016 Mission established “a new living wage of $11 hourly” for hundreds of hospital workers. Assuming a 40-hour work week for 52 weeks a year, an hourly wage of $11 is the equivalent of $22,880 a year in salary.
Based on his reported fiscal-year 2017 total compensation, Paulus collected $1,183 an hour, or $22,880 every two and a half days.
The average salary for registered nurses (RNs) in North Carolina in fiscal 2017 was $62,560, more than $10,000 per year lower than the national average, according to figures provided by the federal Bureau of Labor Statistics. Figures for Mission Hospital were unavailable. In 2011, shortly after Paulus arrived at Mission, the average RN salary in North Carolina was $60,960, meaning they got an average raise of $267 a year from 2011 to 2017. That comes to about 12 cents an hour each year.
Earlier this year the nurses at Mission Hospital voted to join National Nurses United, the biggest collective bargaining union of registered nurses.
Executive pay more than doubles
Mission was not alone in paying generous salaries and bonuses to its non-clinical executives.Multiple studies have shown that salary increases fornonprofit hospital CEOs nationwide far outpaced those for surgeons, physicians, and registered nurses over the past 15 years, contributing disproportionately to the rise in healthcare costs.
Pay growth for nonprofit hospital chief financial officers trailed CEOs only slightly over the same period. Mission Health’s CFO at the time of the sale, Paul McDowell, took home more than $1 million for the four months immediately preceding the sale, tax records show, including a bonus of $317,479 and accelerated payouts of deferred compensation.
Overall, executive pay at Mission Health more than doubled in the eight years preceding the sale. In Paulus’s first year as CEO, the top five executives at Mission took home a combined $3,766,977. In the fiscal year ending in 2019, which included Mission’s final few months of independence, the top five executives took home $8,192,615.
Even so, that pales in comparison to the $26.8 million in total compensation paid in 2019 to Sam Hazen, CEO of HCA Healthcare, Mission’s owner. His annual compensation last year was more than 1,000 times higher than that of minimum wage workers at Mission Hospital, now $12.50 an hour.
‘Upper Echelon’ Pay
Paulus’s base salary and bonuses appear to be “upper echelon” but not necessarily out of line with other comparable nonprofit hospitals and hospital systems with billion-dollar-plus revenues, said Tom Bailey, principal officer and senior consultant at Total Compensation Solutions of Armonk, N.Y., a compensation consultancy specializing in not-for-profit healthcare organizations.
“The first two things I take into consideration are the hospital’s size and location,” Bailey said, adding that other factors include “how long a person has been in that position, and did Mission thrive under his leadership?”
By many measures, it did. In the eight years that Paulus led Mission, it grew to become the state’s sixth-largest health system. Including the acquisition of Highlands-Cashiers Hospital in 2017, Mission Health’s net assets increased to $1.78 billion in the final year of Paulus’s leadership, up from $989 million when he arrived.
Six times in his tenure, Mission Health was named one of the nation’s top 15 health systems by IBM Watson Health. Mission Hospital was also recognized as one of the top hospitals in the nation by U.S. News & World Report in its 2018-2019 edition of Best Hospitals.
Eugene Washington, president and CEO of the Duke University Health System, received $2,534,912 in Duke’s 2017 fiscal year, according to its 2017 IRS 990. Mission in its 2017 fiscal year paid Paulus $2,460,723, a roughly comparable figure.
Both Duke and Mission were nonprofit integrated health systems based in North Carolina. However, the Duke system had total revenue of $3.33 billion, compared to Mission Health’s $1.8 billion; Duke’s gross assets and net assets were also significantly larger than Mission’s. Also, Duke is a big city hospital system, where salaries typically are higher than at rural hospitals.
Carl Armato, president and CEO of nonprofit Novant Health Inc. of Winston-Salem, received $3.4 million in total compensation in Novant’s 2017 fiscal year. Novant operates 15 hospitals and is awaiting approval from Attorney General Josh Stein to acquire New Hanover Regional Medical Center in Wilmington.
Last month, Novant reported that Armato got a raise in 2019 to $4.14 million.
In keeping with community-owned Mission Health’s legacy of disdain for public accountability, no one contacted by Asheville Watchdog would comment on Mission’s tax filings or executive remuneration.
Paulus did not respond to a request for comment.
A spokeswoman for the HCA Healthcare North Carolina Division/ Mission Health said HCA-Mission would not comment on any events that occurred prior to Feb. 1, 2019, the date HCA formally took control of Mission Health.
People listed on tax filings as principal officers and directors of ANC Healthcare Inc., the successor nonprofit that filed the final tax returns for the former Mission Health System and Mission Hospital, did not respond to repeated requests for comment. Records show that ANC (for Asheville North Carolina) Healthcare is based in Winter Park, Florida, and is managed by SOLIC Capital Management of Evanston, Illinois.
A spokeswoman for Asheville-based Dogwood Health Trust, the nonprofit created by Mission to receive the assets from the Mission sale, and led by former Mission board chairs, declined to comment, saying Dogwood has had no connection to Mission or HCA since the sale. Charles Ayscue, former chief financial officer of Mission Health before the sale, and now interim CFO of Dogwood, declined to comment.
As Asheville Watchdog reported earlier, Mission inserted non-disclosure and non-disparagement clauses in its sales contract with HCA that, according to legal advisors to Dogwood Health Trust, prohibit anyone involved with the Mission-HCA sale from speaking publicly about the deal, forever.
AVL Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Peter H. Lewis is a former senior writer at The New York Times. Barbara Durr is a former correspondent for The Financial Times of London. Contact us at firstname.lastname@example.org.
The biggest health crisis in a lifetime hit Asheville shortly after the one-year anniversary of the biggest upheaval in local healthcare: the $1.5 billion sale of the nonprofit Mission Health System to HCA Healthcare, the nation’s largest for-profit hospital management chain.
The transition from local nonprofit to profit-hungry behemoth has not gone smoothly, and not just because of the coronavirus. Now, as Mission Health begins to reopen for elective surgeries and procedures put on hold during the first wave of the ongoing pandemic, the unresolved question that roiled the community just three months ago remains: Was HCA’s purchase of Mission Health healthy for Asheville?
Three months now seems a very long time ago, but just before the pandemic arrived — before the lawns on Mission Health were decorated with “Heroes Work Here” signs and before citizens cheered the front-line health professionals risking everything on their behalf — hundreds of area residents and local officials said they did not think so.
HCA reported to attorney general that Mission Health provided more than $260 million in charity care in first year … and raised prices 10 percent. Read the letter here.
And while the pandemic may have brought a reprieve from widespread negative sentiment, HCA-Mission still faces a vote by nurses to unionize and continuing scrutiny by the attorney general.
“In some ways the concerns that we’ve had haven’t gone away, but they haven’t been the focus of our attention during this completely, historically unprecedented concern about the pandemic,” said Brownie Newman, chairman of the Buncombe County Commission. “Whatever issues we were talking about 90 days ago have been put on pause.”
“As we do get beyond this, there will be a return to the original underlying concerns,” Newman said.
Those underlying concerns run deep.
In a scalding public letter presented Feb. 10 to the independent monitor appointed to make sure HCA complies with terms of the sale, local officials including Newman, Asheville Mayor Esther Manheimer, and nearly the entire delegation of Buncombe County’s elected officials in the North Carolina statehouse accused HCA of flat-out lying about its intentions in taking over the assets and healthcare operations of the Mission Health system.
Before the sale, Ronald A. Paulus, then president and chief executive officer of Mission Health, told a local business group in Asheville that under HCA management, Mission Health would still have “the exact same people and exact same doctors and exact same nurses” providing similar or even superior care for the people of western North Carolina.
Where Mission Health’s nonprofit finances were strained, Paulus said, Nashville-based HCA, with $51 billion in annual revenue, had the resources to invest in new technologies and research. HCA could make money where Mission could not, he said, by cost-cutting “efficiencies” in such back-office functions as billing and purchasing.
Two weeks after the sale, Paulus announced he was leaving Mission and joining HCA as a strategic advisor.
HCA declined to make Paulus available for an interview or respond to questions about him.
Screaming for Help
Complaints about quality of care and staffing shortages dogged Mission in the year after HCA took over. Compared to visits before HCA assumed management, Will Overfelt of Asheville said he observed a decline in all aspects of the hospital from cleanliness to care during his father’s eight-day stay in February, before the pandemic.
His father, who had terminal cancer, wasn’t bathed, Overfelt said. His room wasn’t cleaned, and nurses were so short-staffed that patients on the floor were screaming for help, he said.
“I’m having to chase people sometimes up to an hour to say it’s time for his pain medication,” Overfelt said.
Wondering if his experience was an anomaly, Overfelt started a Facebook page, Mission Maladies, in mid-February.
“I thought I’d get 10 or 15 people, and two or three stories, and they just started coming. It was an avalanche,” he said.
On Wednesday Mission Maladies had 8,689 members.
On April 9, a new Facebook group appeared, Mission Mighty, stating that “some groups have been created to only promote negative opinions,” while Mission Mighty was created to counter the “false perception of what it is like to work at Mission.” On Wednesday it had 1,037 members.
‘It Wasn’t the Deal We Made’
The growing chorus of complaints caught the attention of local officials, who said they felt betrayed.
“HCA has chosen to make its money by reducing charity care, eliminating medical and unit administrative staff to the detriment of patient care and safety, and sacrificing entire physician groups . . . by demanding significant reductions in pay,” the local officials wrote in the Feb. 10 open letter to Gibbins Advisors of White Plains, N.Y., the independent monitor. “That wasn’t the deal we were told about and it wasn’t the deal we made as a community.”
The letter was signed by State Sen. Terry Van Duyn and state Reps. John Ager, Susan Fisher, and Brian Turner, as well as Newman and Manheimer.
An HCA Mission spokesperson said Mission executives responded to the letter by meeting privately with local leaders to discuss their concerns.
Manheimer, the mayor, confirmed the meetings in an email to AVL Watchdog. “We were able to meet in person [with Mission executives] and then we moved to virtual meetings,” she wrote. “There has been some back and forth with HCA addressing the concerns raised in the letter. Some items have been addressed, others have not. Covid-19 has temporarily eliminated some of the complaints, such as staffing levels, for example. But concerns remain and we will continue to press HCA to address the concerns and complaints raised.”
Scrutiny by Attorney General
Because Mission was a tax-exempt nonprofit operating in the public interest, the sale to HCA had to be approved by North Carolina’s Attorney General, Josh Stein. Stein agreed to allow the deal only after setting specific, legally enforceable conditions to guarantee that HCA not diminish the quality of health care in western North Carolina.
The conditions included annual reviews of HCA’s performance. Based on public complaints raised in a series of “town hall” meetings organized by the independent monitor, and in complaints sent directly to the attorney general, the first year’s review raised concerns.
“I am deeply concerned about what I’ve been hearing about HCA – and I want answers,” the attorney general wrote on Feb. 25 to Greg Lowe, president of the North Carolina division of HCA Healthcare. Among the concerns cited by Stein were “a surge in complaints about quality of care” and about HCA’s transparency in billing patients.
In the letter, Stein wrote that some of the complaints his office received from the public about patient care at HCA-run Mission Health were “harrowing to read.” He said he was sharing the complaints with investigators at the North Carolina Department of Health and Human Services.
HCA’s responses to the attorney general’s questions, in a letter from Lowe dated April 30, were shared with local officials Monday.
Financial Aid, Prices Are Up
In its letter responding to the attorney general’s requests for information, HCA Healthcare reported that it collected an increase of more than a half-billion dollars in payments for patient services in the Mission Health System in its first year, compared to the year before, when Mission’s hospitals and clinics were run as nonprofits.
“For the 12-month period following the HCA acquisition, gross revenues for patient services across MHS were $5,851,812,451, a net increase of $548,679,541,” Lowe wrote to the attorney general.
HCA also reported that it provided more than a quarter-billion dollars in discounts from its standard rates to uninsured and low-income patients in the first year.
“Mission Health patients received more than $260 million in financial assistance from HCA during the 12-month period following its acquisition of Mission Health System,” Lowe wrote in the response to the attorney general. That total “amounts to just over $108 million morein financial assistance than MHS provided in the 12-month period prior to the HCA acquisition.”
Besides the charity care policy, Lowe’s response to Stein also addressed nine other questions posed by the attorney general. In one, Lowe said that charges for medical services at Mission Health increased approximately 10 percent after the sale. For each of the four years before HCA took over, the increases averaged 6.8 percent a year.
Lowe wrote that “the significant increase in financial assistance for Mission Health patients,” along with his answers to the other questions, “should reassure you that HCA and Mission Health are committed to upholding their obligations.”
HCA/Mission declined to make Lowe available for comment.
Before the pandemic hit, complaints about a perceived decline in quality of care at Mission Health after the sale were invariably linked to staffing shortages.
“Every single department in that hospital designed to help the patient is critically and unethically, inhumanely understaffed,” Jennifer Kirby, a registered nurse at Mission Hospital for 15 years, told the independent monitor during a public meeting in Asheville.
In a letter to Lowe on March 8, local officials requested exact numbers on staff at the time of purchase, turnover, new hires, and the net increase or decrease in the numbers of technicians, certified nursing assistants, unit secretaries, language and sign-language interpreters, social workers, security, and cleaning staff.
“We request the same information for physicians who are either employed directly by Mission or by private practice groups that contract to provide services at Mission (e.g. cancer specialists, pathologists, hospitalists, ER physicians, etc.),” the officials wrote.
As of Monday, they had not received a response. Mission did not respond to a similar question from AVL Watchdog.
Competition for Workers
Mission did, however, issue an “open letter to our community” from Lowe two days after the local officials requested staffing numbers, in which he said Mission Health had recruited more than 100 new physicians and advanced practice providers, and had hired “hundreds of RNs, as well as other bedside caregivers and support team members.”
Critics contend that any new hires by HCA in the first year were offset by the loss of many long-time Mission doctors and nurses who quit or took early retirement as a result of HCA’s policies, including demands that some doctors and practices accept a reduction in pay. Several doctors’ practices, some that had treated generations of Asheville patients, also severed ties with the new management over fee disputes.
At the same time, Lowe wrote, inpatient admissions and emergency room visits grew more than 10 percent in 2019, while intense competition for skilled nurses and other healthcare workers made it harder to fill hundreds of open positions.
Separately, Lowe told local officials in a meeting Feb. 21 that HCA had moved aggressively to recruit more nurses, technicians and other healthcare workers, and had, for example, raised the minimum wage throughout the system to $12.50 an hour, from $11, and raised minimum pay for some technicians to $15 an hour.
Nurses contacted by AVL Watchdog said policies put in place by HCA have made their jobs even more stressful during the pandemic.
Kerri Wilson, a cardiac nurse at Mission Hospital, said that staff reductions and restructurings made by HCA put nurses under stress and caused many veteran nurses to quit or take early retirement. HCA also reduced the number of certified nursing assistants and other support personnel, she said.
Now, after two months of pandemic, and three months after the public hearings, “We’re still facing staffing shortages, and increased staff ratios per the grids HCA put in place,” Wilson said last week. Higher nurse-to-patient ratios mean one nurse on duty has to care for more patients, resulting in a greater workload and less time per patient.
Four Covid-19 Deaths at Mission
Asheville appears — so far — largely to have been spared the overwhelming surge of Covid-19 infections and death that many feared, thanks to early action by local officials, widespread public support for a near-total shutdown of nonessential activities, and heroic work by healthcare workers, including those in the HCA-run Mission Health System.
As of May 13, Buncombe County officially had 105 lab-confirmed cases of Covid-19 and four deaths. There were two confirmed Covid-19 patients hospitalized at the flagship hospital in Asheville Monday afternoon, according to William Hathaway, Mission Health’s chief medical officer.
In a conference call April 20 to update the public on Mission’s Covid-19 response in western North Carolina, Hathaway, along with Mission Hospital’s chief medical officer, Anthony Spensieri, described how Mission was able to leverage HCA’s expansive supply chain to quickly obtain personal protective equipment for the staff, including doctors, nurses, and technicians, and to obtain ventilators and rapid-testing equipment for diagnosing the virus and resulting antibodies.
The officials also pointed to new management, training, safety, testing, and logistics systems that contributed to Asheville’s lower infection and death rates, compared to other North Carolina counties. They said the “best practices” and training developed during the first wave will put Mission in a better position if, as many medical experts believe, a second wave of Covid-19 spreads in the community this summer and fall as a result of relaxed stay-at-home orders.
Meanwhile, HCA, in its first-quarter financial report filed April 30 with the Securities and Exchange Commission, revealed that systemwide its emergency-room and inpatient-surgery traffic fell 50 percent so far this year because of the pandemic, with a 70 percent drop in hospital-based outpatient surgery. Both are major sources of the hospital system’s profits. Hospital admissions dropped 30 percent in April compared with a year ago, HCA said.
HCA’s top executives said the length and depth of the financial hit will depend on how quickly states reopen their communities. They said recovery will also depend on the broader economy, and how many households lose health insurance because of unemployment.
Battle Over Nurses’ Union
If the pandemic were not enough, there’s another new battle, and it too is vicious. Hundreds of nurses at Mission Health have petitioned the National Labor Relations Board asking for an election to join National Nurses United (NNU), with 150,000 members the country’s largest labor union for registered nurses. By affiliating with the union, the nurses hope to gain collective bargaining rights that they now lack.
Mission nurses have spoken publicly about seeing exhausted colleagues weeping in the hallways, and patients recount how it sometimes takes 45 minutes or more for nurses to respond to call buttons.
Several nurses told AVL Watchdog that although Mission officials publicly said there was no shortage of masks, gowns, gloves, and other personal protective equipment for Mission employees, the nurses were first prohibited from wearing masks because they were told it would alarm the patients, then that the hospital was following Centers for Disease Control guidelines for conserving mask supplies, then that respirator masks were unnecessary for most employees, before finally allowing them to bring their own masks from home.
In a letter to employees on March 23, Mission wrote: “To help ensure our caregivers and patients continue to have enough supplies and equipment, we are implementing steps recommended by the Centers for Disease Control to conserve PPE.”
But three days later, after widespread complaints from nurses, nursing assistants, technicians and city officials, Mission told employees and local officials it was changing its policies to allow universal masking.
“Responding to employee concerns, Mission Health will change its personal protective equipment policies to allow staff to wear masks in all areas of Mission facilities,” Lori Kroll, vice president for the North Carolina Division of HCA Healthcare, wrote in an email to Asheville City and Buncombe County officials on March 26. “Our nursing staff has expressed a significant increase in anxiety with regard to the inability to wear their own commercially purchased PPE in areas that do not come into contact with COVID-19 patients or those who have been tested and are awaiting results (aka PUIs).” PUI is persons under investigation for covid-19 infection.
Kroll’s email was first reported by the Asheville Citizen-Times.
‘Spreading Fear and Misinformation’
While HCA Mission was appealing to delay the union election because of the demands of the pandemic, it also scheduled a series of hour-long “informational meetings” and one-on-one meetings led by professional labor union opponents hired by HCA. A Mission spokesperson said the meetings were voluntary. Many Mission nurses said they were told by their supervisors they had to attend.
On April 2, Mission nurses delivered a petition to management calling for an end to the informational meetings during the pandemic. Mission responded the same day with a public statement.
“Mission Health has frequently stated our position on unions, but the union’s behavior during a crisis shows exactly why we believe a union is wrong for Mission Health and Asheville,” wrote Nancy Lindell, Mission Health spokeswoman. “It’s unfortunate that the union is attempting to turn a crisis into a publicity event designed to promote the union’s own agenda and spreading fear and misinformation.”
Mission officials say such stories are part of union propaganda, and only serve to demoralize the staff and worry the community.
“As a professional, a nurse for 40 years, it hurts my heart to hear things that I know are not true,” said Karen Olsen, chief nursing executive at Mission Health, referring to some of the nurses’ complaints.
Labor Hearings Delayed
The hospital successfully appealed to the National Labor Relations Board to have the union certification hearings delayed several weeks because of the pandemic. Those hearings, to determine which of Mission’s nurses are eligible to vote for union representation, concluded last week.
Both sides are required to present their position papers to the NLRB Wednesday, with a decision on who can vote expected by the end of the month. Mission is asking for in-person voting, while the nurses, citing concerns about Covid-19, are requesting voting by mail.
Now that hospital operations are gradually returning, the drive for unionization — and HCA’s attempts to discourage it — are going to intensify.
“The nurses being able to organize is one of the ways a community can have more of a voice in the care that is delivered there,” said Newman, the chairman of the Buncombe County Commission.
Reputation Lured Retirees
Mission Health was founded in 1885 by Asheville residents Anna Woodfin and Fanny Patton, who raised money for it by selling flowers. From the start, the desire for profit was always secondary to quality of care and a goal to care for all citizens regardless of their ability to pay. Supporters say the nonprofit status of Mission Health was of great importance in serving western North Carolina, a region older, poorer, sicker, and less likely to be insured than state and national averages.
Also, Mission’s strong reputation for high-quality healthcare through the system was a key driver of Asheville’s recent growth, especially in luring retirees and older residents who now make up more than 20 percent of the city’s population.
Just before the sale, the federal Centers for Medicare and Medicaid Services rated quality of care at Mission Health’s six hospitals an average of 4.33 stars, out of a possible 5. Nationwide, the average of all hospitals for quality of services was 3.15.
The average for HCA’s hospitals was 2.73.
In the latest federal ratings, based on data collected up until June 30, 2019 — five months after the change to HCA — Mission Hospital scored 5 out of 5 stars, scoring above the national average in safety of care, readmission rate, and efficient use of medical imaging. It scored below the national average in mortality and timeliness of care.
Mission Health’s ratings have steadily declined in a hospital safety survey by The Leapfrog Group, a national nonprofit that monitors quality and safety of American hospitals.
Leapfrog’s Fall 2019 score for the Mission Asheville hospital was a “C.” In a trend of decline, the Asheville facility scored “B” grades in Spring 2019 and Fall 2018, after scoring “A” grades in Spring 2018, Spring 2017, Fall 2016, and Spring 2016.
A Mission spokesperson said the latest Leapfrog ratings were based on data gathered before the HCA takeover.
“I’ve lived in Asheville my whole life, and Mission Health always set the standard of care for the entire region,” said Wilson, the cardiac nurse who has been at Mission Hospital for four years. “In the last few years, we started to see a decline, but since HCA took over our community reputation has crumbled.”
The Dogwood Trust
The net proceeds of the $1.5 billion sale of Mission Health to HCA Healthcare created the Dogwood Health Trust, an Asheville-based nonprofit whose goal is make charitable grants of as much as $75 million a year “to dramatically improve the health and well-being of all people and communities of western North Carolina.”
The Dogwood Health Trust said it plans to make its first large strategic grants in the fall. To address immediate healthcare needs and opportunities in the region, however, in February it distributed a total of $3.7 million to 259 nonprofit and government agencies in its 18-county region, for an average grant amount of $14,600.
Dogwood’s board of directors originally consisted mainly of Buncombe County residents who either served on the Mission Health board of directors — and thus voted for the sale to HCA — or who had close ties to the hospital.
As one of the stipulations required by the attorney general as terms of the sale, Dogwood was told to expand the board to represent the full diversity of the region, geographic, ethnic, gender, and socioeconomic. The Dogwood board expanded last year to add more women, rural residents and people of color.
Ultimately, enforcement of HCA’s promises to the Asheville and western North Carolina communities falls to Dogwood and the attorney general. To date, the independent monitor has not indicated any noncompliance with terms of the sale. The monitor, Gibbins Advisors, plans to return to the area for site visits at HCA’s six Mission Health hospitals sometime this summer.
AVL Watchdogis a nonprofit news team producing stories that matter to Asheville and Buncombe County. Peter H. Lewis is a former senior writer and editor at The New York Times. Contact us at email@example.com.
I handed the pharmacist my American prescription for Humalog insulin. “Szia,” I said in my best Google Hungarian, “töltse ki ezt a receptet?” She looked at the paper, and said in English, “Sure, but we have to order it. Is tomorrow okay?”
I asked how much it would cost. “Let’s see,” she said, tapping the keyboard. Then, almost apologetically, “Ten milliliters is . . . 6,543 Hungarian forins. About 20 euros.”
My phone’s calculator made the conversion to dollars: $22 and change for a two-inch vial of Eli Lilly and Company’s fast-acting Humalog insulin lispro, purchased in a random pharmacy near my hotel in Budapest. Back home in the United States, the list price for the same small vial — the exact same insulin, also made by Lilly, except that the labeling is in English instead of Hungarian — is $325.
I’m very fortunate to have health insurance, so I don’t actually pay the “cash” price of $325 per vial (the price paid at the pharmacy by someone who does not have health insurance). With Medicare, my copay in the United States is “only” $90 per vial.
It takes three vials a month to keep me alive.
Nearly a quarter-century ago, when Lilly first received approval from the U.S. Food and Drug Administration to sell it, the list price of a vial of Humalog was $21. Since then, Lilly has raised the list price more than 1,400 percent. Not surprisingly, the two other leading pharma companies that make a similar insulin (Novo Nordisk of Denmark and Sanofi of France) have jacked up their American prices in lockstep.
The formula hasn’t changed. It’s the same insulin today as it was back in the 1990s. It’s the same insulin that Lilly can sell at a profit for $22 to someone paying full price in Budapest. And it’s not just Hungary: Lilly sells Humalog insulin in Canada, Mexico, and other countries for a small fraction of the price it charges in the United States.
That’s why my endocrinologist in Philadelphia now advises her insulin-dependent patients to watch for cheap air fares to Amsterdam. That’s why people with Type 1 diabetes in the United States are increasingly caravaning across the borders to Canada and Mexico to buy insulin and other essential medications. For many of them, affordable insulin isn’t just bargain-shopping; it’s a matter of life or death.
For thousands of people with Type 1 diabetes, the Canadian and Mexican borders are too far away, transportation costs are too expensive, or they’re too ill to travel. For all too many more, even $22 is beyond reach for what is literally a life-saving drug.
The price of a vial of Humalog insulin was $122 in 2012 when Alex Azar II, a former drug industry lobbyist, took over as president of Lilly USA. Five years later it had soared to $274. That’s when President Donald J. Trump nominated Azar to be United States Secretary of Health and Human Services, saying Azar would be “a star for better healthcare and lower drug prices.”
Lilly’s media relations department has not responded to repeated requests for comment.
Type 1 diabetes used to be called juvenile diabetes because, cruelly, it most often strikes infants, children, and adolescents. It is currently incurable. No one knows what causes it, and it is not preventable, unlike the far more common Type 2 diabetes, which is closely linked to obesity and sedentary lifestyle.
Type 2 diabetes is the fastest-growing health crisis in the world, according to the World Health Organization (W.H.O.). An estimated 500 million people worldwide have Type 2 diabetes or have “pre-diabetes.” Type 2s still produce their own insulin, but their bodies either can’t make enough of it or can’t use it efficiently. In America an estimated 30 million people have Type 2 diabetes, roughly 1 of every 11 people, a number that has doubled in the 21st century. Some Type 2s require insulin injections, but most can be treated with diet, exercise, and pills.
Type 1 diabetes is a more exclusive club, but one that no one wants to join. An estimated 1.25 million people have Type 1 diabetes in the United States, all of whom need regular injections of insulin in order to stay alive, because some unknown trigger causes their immune systems to go haywire and attack and destroy the specialized cells in the pancreas that produce insulin. Without multiple daily injections of insulin we sicken and die.
Although the causes and treatments differ significantly, Type 1s and Type 2s share the sickening and dying part. Diabetes kills some 250,000 Americans each year, either directly or indirectly through “diabetic complications” that include heart disease, kidney failure, limb amputations, blindness, nerve damage, and stroke.
Here, greatly simplified, is how it kills and debilitates:
Enzymes in the digestive system convert much of the food we eat into glucose, a simple sugar. In a “normal” body, the pancreas — an organ about the size of your open hand, located behind your stomach — secretes just enough insulin to enable the cells to metabolize glucose, which the cells, in turn, convert into energy.
Without insulin, or with insufficient amounts of it, our cells can’t absorb the fuel they need, any more than an automobile engine can absorb gasoline poured over the car. The cells begin to starve and toxic levels of glucose build up in the bloodstream, damaging blood vessels and organs and nerves and hindering the body’s ability to fight infections.
In its desperation to flush the higher concentrations of sugar from the blood, the body demands fluids, leading to relentless thirst, frequent urination, and, paradoxically, dehydration. At the same time, the starving brain sends signals to begin breaking down fat, then muscle, then organs.
For Type 1s, it happens quickly. In less than three months I went from 185 pounds to 140, attributing the loss to playing a 40-game baseball schedule in the broiling Texas summer sun while wearing catcher’s gear. I drank gallons of Gatorade and still fantasized about diving, mouth open, into a swimming pool. I had to pee between innings. My vision blurred. The baseball got fuzzy, which was not good as a batter nor as a catcher. My throws to second base started bouncing just past the pitcher’s mound.
Off the field, my concerned family tried to fatten me up by feeding me milkshakes and pizzas and extra desserts. I nodded off in meetings and woke up exhausted. The weight continued to melt away. Finally, certain that I had developed a rare form of narcoleptic, hydrophiliac cancer, I called the doctor.
“Classic Type 1,” the doctor said after examining me and doing some blood tests. He gave me a bottle of insulin and a pack of syringes and sent me to a Type 1 diabetes class, where we learned to check our blood glucose with fingersticks several times a day, and to calculate how much insulin we needed to stab into our bellies.
Insulin, it turns out, is an exceptionally powerful drug. Too little leads to hyperglycemia and diabetic complications, but too much leads to dreaded “hypoglycemic reactions,” where blood sugar gets dangerously low. The body slams out adrenalin, the brain becomes disoriented, muscles tremble, sweat pours uncontrollably, and language slurs. Unchecked, hypoglycemia can lead to coma, seizures, and all too often death.
Some of my classmates in “Welcome to Type 1 Diabetes” class were in elementary school. Some were frightened parents holding their newly diagnosed Type 1 toddlers. “If you’re going to get an incurable disease,” the nurse told us, “at least diabetes is a manageable incurable disease.”
As we would soon learn, the health care system apparently finds that managing diabetes is far more profitable than curing it.
Until less than a century ago, a diagnosis of Type 1 diabetes was a cruel death sentence. Healthy children and adolescents, but also some adults, were quickly reduced to emaciated, suffering husks. Perversely, the only known way to keep blood glucose from rising fatally was to radically reduce eating; already skeletal young patients were put on near-starvation diets. Life expectancy after diagnosis typically was less than a year.
Then, in the summer of 1921, two young researchers in Canada — Dr. Frederick Banting, a surgeon not yet 30 years old, and his assistant Charles Best, a chemistry student at the University of Toronto — discovered a way to isolate and extract small amounts of insulin from the pancreases of dogs and other animals. That winter they injected the animal insulin into a boy, Leonard Thompson, who was dying at Toronto General Hospital. The boy recovered enough to be sent home.
The “discovery” of insulin 98 years ago by Banting and Best is now regarded as one of the most important advances in the history of medicine.
News of their success spread quickly through medical journals and word of mouth, and by the summer of 1922 it was impossible for Banting and his colleagues to extract and refine enough life-saving insulin to meet the desperate pleas from physicians and patients across the continent.
The news also attracted investors eager to capitalize on the new discovery. An American businessman raced to Toronto to offer Banting one million dollars in cash if he would hand over the patent to a group on Wall Street. The group would in turn secure a patent on insulin in every country of the world, and would pay Banting a five percent royalty on all insulin sold. Banting would be fabulously wealthy, the investor told him, and would no longer have to see patients “except for a few very wealthy ones by appointment.”
“I only asked him one question,” Banting recalled years later in his memoir. “What would you do for the poor diabetic who could not pay?” Unsatisfied with the man’s answer, Banting told him, “The indigent diabetic is our greatest problem. Every effort must be made to reduce the cost of insulin . . . ”
As a physician, Banting argued, he was bound by his profession’s code to make such a life-saving advance in health care freely available to mankind. It was immoral, in his view, to profit from the misfortunes of those who were desperately ill. At the same time, Banting recognized that patenting the discovery would be a safeguard against unscrupulous or incompetent companies that would make and market inferior, perhaps dangerous, insulin.
An ethical compromise was reached: Charles Best and another researcher, neither of them physicians, would patent the process (Banting was eventually persuaded to add his name), and then, in return for the sum of one Canadian dollar each, they would assign the patent to the University of Toronto. The University would in turn freely publish details of the insulin preparation process, thereby preventing any one company from ever establishing a monopoly.
Patent issues aside, the more immediate challenge was to produce more insulin. The researchers were able to harvest only a few cubic centimeters of insulin solution in one production run, barely enough to treat one patient, and their repeated efforts to scale production to commercial levels failed. Even though the number of patients who were given the experimental treatment was kept deliberately small, an “insulin famine” ensued. The researchers resorted to rationing what meager supplies they had, with predictable results.
In February 1922 an emaciated young girl, a friend of Charles Best, was admitted to Toronto General. She showed improvement soon after receiving insulin injections, but then the insulin supply ran out and she slipped into a coma. Doctors scrounged what they could of partially prepared insulin from the lab, and the girl awakened, the first time any diabetic patient in Toronto had recovered from coma. But once again the supply was exhausted. The girl died in April, becoming perhaps the first person to die from inability to obtain insulin since the miracle treatment was discovered. She would not be the last.
The best hope of rapidly producing large quantities of high-quality insulin, the University of Toronto’s Insulin Committee decided, was to partner with Eli Lilly and Company of Indianapolis, Indiana, the leading “ethical” pharmaceutical company in the United States, at a time when quack medicines and snake-oil charlatans were common. Already in business for nearly 50 years, Lilly had earned a deserved reputation for medical rigor and manufacturing expertise.
Lilly was eager to help, on the condition that it receive an exclusive, one-year license to sell insulin in the Americas outside of Canada. In return, Lilly promised to supply Banting and the university with all the insulin they needed for their patients; any surplus insulin, Lilly promised, would be sold at cost. Afterward, Lilly would also pay royalties to the University of Toronto to support its medical research program.
The deal was struck. By the summer of 1923 Lilly was churning out enough therapeutic-grade insulin to save the lives of some 20,000 Type 1 diabetics.
Later that year Frederick Banting was awarded a share of the 1923 Nobel Prize in Medicine, which he insisted on sharing with his assistant, Charles Best.
The patent they had willingly relinquished for one dollar each would soon generate millions of dollars in royalties for the University of Toronto, and millions more in profits for Lilly, which had parlayed its exclusive license into a dominant market position.
Also, without informing the Canadians, Eli Lilly and Company had also secretly applied for the American patent covering the process that the Canadians had invented. It was necessary, Lilly executives argued when confronted by the Canadians, to protect the investments Lilly made to scale up and refine the manufacturing process.