THE HOSPITAL ECONOMICS
OF COVID–19

Joel E. Colley, M.D.

As with all businesses, the hospital business runs on and is governed by revenue generation.  To the Administrators, the delivery of actual “care” is secondary. For the Administrators (“admins”), it is all about the quarterly profits.  This holds true for the illusory term “non-profit” hospitals as much as it does the “for profit” model.  Both must receive more income than expenses to survive.  There are differences in the reporting models for IRS purposes, but for our discussion here, they can be considered together as the same. 

Without question, as Medicine has become more complex, extremely large sums of money are quietly and quickly being distributed.  As cash flows greatly increase, it was only a matter of time and organization before sophisticated models were conceived to maximize income over expenses.  This involves the hiring of a large number of Administrators who are in turn supervised by a cadre of “alphabet” Officers: the CEO, The CFO, the COO, etc.

The business “solution” to these corporate mavins is to maximize anything producing income and to reduce or eliminate everything possible in the expense category.  Generally, this means gaining total control over the largest expense in the model, the Service Employees. Service Employees deliver the actual services the patients receive, and the ratio of employees (i.e., Nurses, techs, cleaning staff, etc.) to patients has been decreasing steadily over the previous 20 years.  This means more patients have to be under the care of fewer service staff. 

We make the distinction between the Administrative Staff (“admins”) and the Service Employees.   The admins consider themselves to be vital to the overall economic health of the model, and in some ways this is true.  They generally work in the daylight hours of 8:00AM to 4:30PM attending meetings, finding methodologies to cut expenses, and writing policies to insure “Quality of Care”.  The Policies are important to insure continuing income streams from the government and “Third Party” payers, the insurance companies.  They do not actually care about quality, only that the policies are in place as required and the policies are followed exactly.

These admins are paid handsome salaries, frequently more than the Physicians, with even more handsome bonuses if they can elicit higher corporate profits.  Their bonus structures are very liberal, possibly more than doubling their base salaries.  How the admins increase profits after cutting Staff to the bare minimum is obvious; all that is remaining is a cut in delivered services.  This is a topic deserving its own article.

The next step in controlling costs was to bring the Physicians under the corporate umbrella by hiring them directly instead of letting them continue in Private Practice.  This was done insidiously in the initial stages in many minor changes growing quickly to complete control in less than a decade.  These Physicians owe their allegiance to the hospital corporation, not the patient, and now we have a problem, Houston!

We have a specialist Physician group called Hospitalists.  Their entire salary is paid by the hospital corporation, often with sizeable bonus if the Physician is able to justify more tests and procedures related to the Diagnosis Codes.  Of course, the Patient is not allowed to stay in hospital one second longer than is allowed by the diagnosis code.  This new specialty of Hospitalists are experts at effecting all these new requirements.

With all the above in place, the admins were more than ready for the Covid–19 event.  Merely placing the diagnosis of “Probable Covid” on the Patient’s chart netted the Hospital approximately $13,000 “extra” at the start.  That Covid–19 diagnosis allowed for the ordering of a large volume of extra tests and procedures, all of which added to the hospital’s profits.  Already in place were the controls and protocols to reap a bonanza in extra federal income.

Placing a Patient on a ventilator, generally the wrong treatment, netted the hospital admins another $30,000, and that is a “Global fee”.  That means they make $30,000 if the Patient is on the ventilator 10 minutes or 48 hours.  Since most patients succumbed in a few short hours when placed on the ventilator, that same ventilator could be cleaned and used again and again, perhaps on three different Patients in 24 hours, netting another $30,000 for each Patient using it.  Can you see why the demand for ventilators became astronomical.  The admins were experiencing income ecstasy!

Since the protocols (the wrong treatment) were in place, Physicians and other health care professionals were “protected” from criticism: “We are following the CDC proscribed treatment protocols, so, NO, you will not receive alternate therapies, and you will be ventilated”.  Family members were excluded from being present with their loved ones, who were now intubated on a ventilator, sedated, and could not object themselves.

For the first time in recent history, the hospitals were making more money from an alleged infectious disease than they were making for surgical procedures.  Surgical procedures have always been the bedrock income of hospitals, until now.  All that was needed was a presumptive diagnosis of Covid–19, and the cash cow was flowing like never before.  Anyone opposing the Standard Line was quickly ridiculed, ostracized, and their career ruined. 

Even in the face of rapidly increasing knowledge, the push to maintain these profits is enormous!  Obvious inconsistencies are quickly explained away as “fringe non-science”.  The rapidly expanding anti-covid volumes of data are quite enormous, but the Main Stream Media refuses to report it.  Even “Big Pharma” and “Big Medicine” principals, the ones with a conscience, are stepping forward to take up the battle cry many of us began almost two years ago.

Now we cannot be stopped.  Our data are expanding daily, while the old guard profit seekers rely on Protocols proven to be incorrect and damaging.  This is possibly an event affecting the health and welfare of the entire Human Species.  Those of us who take our Hippocratic Oath seriously will not be silenced, nor will we sit idly by watching this happen. 

With the CDC “approval” of the Pfizer genetic therapy injection (it is NOT a Vaccine), we shall now learn much more about that agent, the side effects of it, and whether or not a person should subject themselves to it over “natural immunity” for a virus that is, overall, 99+% survivable.

Joel E. Colley, M.D., FACA, DABA

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