Arizona's three largest hospital systems are leaving a statewide hospital lobbying group over concerns about how the group represents the large hospitals on legislative and regulatory issues.
Abrazo Health Care, Banner Health and Dignity Health (formerly Catholic Healthcare West) on Friday informed the Arizona Hospital and Healthcare Association that their membership will end effective March 1.
The pullout by the three hospital systems that represent more than 20 metro Phoenix hospitals comes as larger urban hospitals have faced rising numbers of uninsured patients seeking free or reduced-cost care in hospital emergency rooms. The hospitals say the rise in uninsured patients follows the Legislature's cuts to the state's Medicaid program and Arizona's tepid economic recovery.
"Fundamentally, we believe at this juncture the association can't represent our interests," said Suzanne Pfister, vice president of external affairs for Dignity Health, a three-hospital system that includes St. Joseph's Hospital and Medical Center.
The three hospitals' top executives said in a letter to Arizona Hospital and Healthcare Association CEO Laurie Liles that the hospital association "is no longer consistent with nor reflective of our collective interests on legislative and regulatory issues before the governor and state Legislature."
The letter added: "We know you have sincerely tried to manage the disparate voices within the organization, but we no longer believe the association can serve as a voice for our concerns."
The letter was signed by Banner Health CEO Peter Fine, St. Joseph's Hospital CEO Linda Hunt and Reginald Ballantyne III, senior corporate officer of Vanguard Health Systems, which controls the six-hospital chain Abrazo Health Care.
Pete Wertheim, a spokesman for the hospital association, said the hospital association is still gathering information about why the hospitals decided to leave.
"Obviously, there have been some incredible challenges with hospitals and the budget cuts and other factors," Wertheim said.
The hospital association has not calculated the financial impact of losing its three largest dues-paying members, but it expects to cushion the financial hit with revenue collected through services such as a nursing registry and a discounted vendor program.
Among the major challenges facing hospitals is securing hundreds of millions in federal dollars lost when the Legislature and Gov. Jan Brewer imposed deep cuts to the Arizona Health Care Cost Containment System, or AHCCCS, the state's Medicaid program.
The hospital association proposal to assess a bed tax on hospitals to recoup matching federal dollars received little support at the Legislature. The hospital association also backs a pending legal challenge to AHCCCS enrollment freeze for childless adults. The state Supreme Court next month will decide whether to hear a case challenging the state's enrollment freeze for childless adults in the state's Medicaid program.
Representatives of Banner Health, Dignity Health and Abrazo Health Care said it is pivotal to find a way to reverse the impact of the Medicaid cuts.
Ballantyne said that securing matching federal dollars will be a significant issue for Abrazo, Banner and Dignity Health.
"Within the membership of the association are those who do not place as high a priority on finding a solution permitting the flow of these matching federal funds," Ballantyne said. "We need to take steps to assure solutions and that has grown increasingly difficult given disparate views within the association membership."
The three hospital systems have not yet released a proposal to secure matching federal dollars, but they say they realize it is important to act quickly.
St. Joseph's Hospital reported a 37 percent surge in charity care and bad debt from July through October last year compared with the year before.
Charity care describes free or discounted care a hospital gives to patient who does not have the financial resources to pay their bills, and bad debt stems from patients who don't pay.
St. Joseph's Hospital and its two sister hospitals have responded with their own staffing cuts, eliminating or freezing 300 jobs.
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