Gundersen disputes hospital's ranking as nation's most profitable

A Wisconsin-based non-profit healthcare system disputes a recent study that found one of its hospitals is the most profitable in the United States in a statement released this week.

In ranking La Crosse, Wisconsin's 239-bed Gundersen Lutheran Medical Center as the most profitable U.S. hospital, researchers relied on incomplete Medicare cost report data rather than accounting for Gundersen Health System's full costs as an integrated system, write Gundersen CEO Scott Rathgaber, M.D., and CFO Dara Bartels. In-house analysis found system-wide operating margins over the past few years range between 4 and 5 percent, and earnings, rather than being hoarded, were invested in service expansions and care improvement initiatives.

RELATED: Profitability study authors respond to criticism

Rathgaber and Bartels compare the analysis to judging a family's finances by nothing but its top earner's income and failing to account for expenses. With more complete data, they write, Gundersen Lutheran would never have placed in the nation's top 10 most profitable providers.

Moreover, lack of standardization in Medicare cost reports makes comparisons between health systems and hospitals essentially useless, they write. "Analyzing Medicare cost reports of a single care center may have been relevant 20 years ago," they write, "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."

The study also fails to account for care quality, Rathgaber and Bartels write, nor does it factor in the system's status as market leader in a region with the nation's lowest care costs per Medicare beneficiary.

Study authors responded to the criticism in a recent Health Affairs blog post, stating the Medicare cost report is a reliable data source for hospital comparisons and is used by many researchers in published peer-reviewed articles

To learn more:
- here's the statement

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