Gundersen Health System CEO, CFO: Health Affairs study on nonprofit hospitals 'simply not true'

Leaders of La Cross, Wis.-based Gundersen Health System have come out against a study recently published in Health Affairs that reported seven of the 10 most profitable hospitals in the U.S. in 2013 were nonprofits, calling the study's findings "misleading" and "simply not true."

Scott Rathgaber, MD, CEO of Gundersen Health System, and CFO Dara Bartels published a message on the health system's website detailing how the study "is challenging Gundersen's position as a high-quality, integrated health system that values continuous examination of expenditures, reduction of waste and reinvestment in the communities we serve."

According to the Health Affairs study, which used 2013 data from Medicare Cost Reports and Final Rule Data, "the 239-bed nonprofit Gundersen Lutheran Medical Center in La Crosse, Wis., was the most profitable hospital in the U.S., earning a profit of $302.5 million, or $4,241 per patient."

Dr. Rathgaber and Ms. Bartels say "this is simply not true." Here is their reasoning.

1. They claim the study used incomplete data taken from Gundersen's Medicare cost report, which doesn't include its full costs as an integrated health system. "If the authors had looked at a complete set of data, we wouldn't have been on the list," Dr. Rathgaber and Ms. Bartels wrote.

2. Gundersen's finance team combed through data and found the contribution margin for its obligated group — the La Crosse Hospital, Clinic, Gundersen Lutheran Administrative Services and Gundersen Medical Foundation — has remained low since at least 2008. The system's contribution margin in 2013 — the year analyzed in the Health Affairs study — was 4.4 percent.

3. A point that "strikes at the heart of the article's inaccuracy," according to Dr. Rathgaber and Ms. Bartels, is that Medicare cost reports are not uniformly reported, which disallows for a true "apples to apples" comparison between hospitals and health systems. "Analyzing Medicare cost reports of a single care center may have been relevant 20 years ago, but using the same methodology now for an integrated health system network isn't constructive, but is rather a necessary evil as required for Medicare reimbursement," they wrote.

4. Ultimately, Dr. Rathgaber and Ms. Bartels said the study fails to take into account the quality of care Gundersen Health System provides to patients. "We do not apologize for our constant attention to providing exceptional care or the recognition we receive for accomplishing this goal," they wrote. "We make no excuses regarding the value we bring by working diligently to become more efficient and lower the cost of care to our patients, while retaining the high level of quality our patients have come to expect."

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