I am really glad that this Promedica takeover at Lukes has been put on hold. Can anyone explain to me Lukes history of financial problems???? I have several friends that work there and they are mystified by this as there are always "butts in the beds". Would love to hear what people are thinking...
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There may be butts in the seats, but are those butts actually paying the costs? The answer is no because they don't have the insurance contracts that the other hospitals have. Also, I would venture to believe they don't get the specialty doctors and surgeries, etc. because those doctors are located where they can make more money.
I personally think it's hogwash. What's worse, merging with Promedica or shutting down? Cordray is just trying to make a name for himself before he's out soon...
If they aren't bringing in enough reimbursement to cover the cost of the patients, it doesn't necessarily matter that the beds are full.
St Luke's didn't necessarily have negotiating power or clout for insurance contracts, and you can't sustain yourself on Medicare and Medicaid reimbursement.
(No inside knowledge of the particular situation, just familiar with the ins and outs of the industry.)
mom - maybe you know, my wife who works in healthcare here in Toledo mentioned this area has the highest per capita hospitals to residents, is this true? It sure seems as we have a lot of hospitals. What outsiders don't understand, is there may be too much competition that it's unprofitable.
Acccording to the FTC trade commision St. Luke's is financially healthy with a sustainable future.
There is a lengthy article in the business section of Today's Blade. Two statements in the article stand out.
"The agency, the complaint states, obtained documents which reveal that principal motivation for the aquisition was to gain enhanced bargaining leverage with health plans and the ability to raise prices for services"
Continuing on in information provided by Richard Cordrey, Sec. of State, ...."the state and FTC have records....that show that St. Luke's was a financially strong and viable competitor. It is nowhere near any imminent closure or collapse."
After reading the Blade article I have two questions. Who, at St. Luke's, was in favor of this merger and, more importantly, why? Suspicious cynic that I am, could there have been promises of positions within Promedica with enhanced salaries?
Holland - the first statement is the reason why they are doing it. They need to raise the rates they are charging patients/insurance companies to cover their costs. I am removed from the industry and from the merger but I've heard they've been losing millions of dollars per year for quite a while now. That completely contradicts what Cordrey is saying. I can't find the Blade article right now, but I thought I read it somewhere back in the summer when the merger was announced.
One thing to think about - why does Toledo need 3 hospital systems when Cincy, Cleveland, and Akron/Canton all have 2? (I think Columbus has 3).
Who are you referring to by "they"? St Luke's is apparently NOT losing money. If ProMedica is losing money then the competitive forces of the market are working and Promedica needs to reign in costs.
St. Luke's. When it was first announced they were hemmorging money like crazy. It was solvent because they had cash on hand, but operationally losing money while others were making money.
I heard a number like they lost $3M-$5M until the acquisition. I don't know where the gov't is getting an idea where that is "financially viable." If I had a money losing business, I would definitely be looking for something to do - acquisition or closure at some point.
Well, it appears that one theory or the other will be sorted out in court.