Hospital Coverage Belongs on the Business Page

These institutions are often a community's largest employers. They can count upwards of 1 million customers at any given moment. They run almost $500 billion in expenses nationwide, and a third of them say they're losing money because of that.

And yet, they rarely find their way onto a business beat.

They're hospitals -- and they belong on the business page. Business and health care reporters are losing a key opportunity for Page One stories -- and a key connection to their readers -- by neglecting the financial side of one of the country's most dominant industries.

Most people aren't touched daily by manufacturing trends, and few think about the inner machinations of high-tech products. But every single reader has a stake in health care. Their quality, and sometimes lengthening, of life depends on it. That's a staggering audience.

"Patients are customers of a hospital," argues Kristen Hallam, an Association of Health Care Journalists board member who's covered the business of health care for seven years, most recently for Bloomberg News. "They should really start seeing themselves that way and start demanding information about the business they patronize."

And there's financial information aplenty -- from doctor's salaries to profit margins to property taxes.

"Hospitals generally don't like to portray themselves as businesses. But they are. And they're huge businesses," Hallam says. "They have a chief financial officer. They have accountants. They have cash flow and all those things, like any other business."

Their business, however, helps decide the lifespan of the local community. That warrants an even closer eye. The first step is general knowledge -- know the laws, know the players, know your rights.

Read up on federal and state laws to see what financial information is required of your local hospitals. Find out when and to whom it's filed. Look at the breakdown of hospitals -- some are nonprofit, some for profit. Understand the payment processes, for instance, between hospitals and Medicare and Medicaid agencies. And learn what documents you are entitled to, like Form 990s, the "annual report" that nonprofit hospitals file and must hand over when you request it. Thank federal law for that.

There's also the horse's mouth. Hallam recommends the American Hospital Association's own Hospital Directory and Hospital Statistics resource books. The former lists names and phone numbers of the country's registered hospitals and regulatory agencies, while the latter gives national numbers for everything from pneumonia patients to heart attack victims. "That's kind of a good cheat sheet," she says. Plus, she adds the magic word for journalists who request the books through AHA's PR arm: free.

After you've finished the groundwork, start laying bricks to good coverage. Follow the trail of money wherever it leads you, in and out of the hospital.

Hunt down financial filings, at state agencies for for-profit hospitals and the aforementioned Form 990s for nonprofit hospitals. You can also go online at Guidestar.org for those 990s. Hunker down with Medicare Cost Reports, and if necessary, draft the help of an accountant to go through those line by line. Hallam said when she started her beat, she rang up a competing hospital and asked for a working lunch on background to learn those Cost Reports.

Check out state inspection surveys and federal accreditation records from the Joint Commission on Accreditation of Healthcare Organizations. Make sure hospitals are performing up to standards they promised when they signed those dotted lines. Hospital quality studies and Web sites such as Hospital Compare can nudge you in the right direction. (In fact, the latter has quite conveniently just released a transcript and materials from its last briefing on April 11.)

"Certainly, reporters need to be evaluating the kind of products and services hospitals put out," says Trudy Lieberman, AHCJ president and director of the Center for Consumer Health Choices at Consumers Union. "Because hospitals are looked at as wearing white hats and as good guys, reporters tend not to look very skeptically at them."

Especially, she adds, when it comes to charity care. Hospitals may play the benefactor when treating poor patients, but behind closed doors, some switch garb to grubby money-collectors. "A lot of hospitals are pretty nasty about collecting debt from people who don't have a dime," Lieberman says.

Keep an eye on when the Centers for Medicare & Medicaid Services, the federal overseer of those programs, changes the rates they pay hospitals for those services. Check with state agencies that control rates for Medicaid. See what extra tasks the government may be paying hospitals to do, whether training doctors or treating an inordinate number of poor patients.

At 42 million Medicare patients and 50 million Medicaid patients, the population is way too large to ignore the flow of dollars.

Then, Hallam says, check out the flow heading the other way. Hospitals lean heavily on government funding, so they'll also spend a few bucks on lobbying legislators. How much, you ask? Well, head to a handy Web site, Politicalmoneyline.com to find out. Its database of campaign contributions is searchable by hospital CEO names.

Search for your community's largest employer, when it's not the hospital itself. Follow the negotiations between that employer's health plan provider and the hospitals. What's included and, more importantly, not included for a healthy chunk of your area's workers?

Look beyond the CEO for sources. A hospital's biggest expense is its labor -- tap into that. Get to know nurses, doctors and union leaders, who can hopefully slip you more scoops than the board members would like. "Doctors are another source of dirt because they're often at odds with hospital management," Hallam says.

Lieberman suggests scoping out accountants and lawyers who can put a hospital's balance sheets into context. And head to patient advocacy groups to find a hospital's financial sticking points -- and real people truly stuck because of them.

Finally, don't overlook competitors. Forget dirt, they've got certified mud on each other's hospital finances. They compete for money to offer specialized care like obstetrics or cardiology, what they appropriately -- but somewhat secretly -- call "lines of business."

So at least within their own inner circles, hospitals have identified what they do as business. Now reporters just need to jump aboard.

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism