As Parkland built up reserves, patient care suffered

Parkland Memorial Hospital in Texas was so singularly focused on building a new facility and maintaining cash reserves that it neglected the safety of its patients being treated in its existing facility, the Dallas Morning News reported.

According to the newspaper, the hospital had amassed about $1.5 billion in reserves by 2011--subsidized in part by a highly generous local property tax levy. That compares to about $300 million in 2005.

However, nearly a third of that was earmarked for new hospital construction. The new hospital was being compared in size to Cowboy Stadium by hospital officials, according to the Morning News. And as construction commenced in 2010, the hospital cut about 200 positions to save money.

"How can they have $1 billion and they couldn't improve quality a little bit?" Dana Forgione, a professor healthcare finance at the University of Texas, told the Morning News. "I understand there's got to be a trade-off between current expenditures and long-term investment in new and improved facilities. But $1 billion is a lot of money, right?"

The channeling of money away from operations at its existing facility prompted federal regulators to order the hospital to put at least $75 million back into operations.

Although hospital construction is booming throughout much of the U.S., the Dallas region is spending $6 billion on new hospital projects, the Morning News reported

To learn more:
- read the Dallas Morning News article on Parkland Memorial
- read the Dallas Morning News article on hospital construction in Texas