The Evolution of Charity Care of the University Hospitals of Cleveland
Total Page：16
File Type：pdf, Size：1020Kb
THE EVOLUTION OF CHARITY CARE OF THE UNIVERSITY HOSPITALS OF CLEVELAND By RICHARD HENRY CARTABUKE Submitted in partial fulfillment of the requirements For the degree of Master of Arts Thesis Advisor: Dr. Jonathan Sadowsky Department of History CASE WESTERN RESERVE UNIVERSITY August, 2009 CASE WESTERN RESERVE UNIVERSITY SCHOOL OF GRADUATE STUDIES We hereby approve the thesis/dissertation of _____________________________________________________ candidate for the ______________________degree *. (signed)_______________________________________________ (chair of the committee) ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ (date) _______________________ *We also certify that written approval has been obtained for any proprietary material contained therein. !" Copyright © 2009 by Richard Henry Cartabuke All Rights Reserved #" DEDICATION I dedicate this thesis to my parents. Without their patience, understanding, support, and most of all, love, the completion of this work would not have been possible. $" LIST OF TABLES Table 1: Annual Patient Admission Data from Wilson Street Hospital (1872-1874) Table 2: Revenue Sources and Expenditures for Wilson Street Hospital (1872-1874) Table 3: Annual Patient Admission Data from Cleveland City Hospital (1876-1888) Table 4: Number of Days of Treatment Data for Cleveland City Hospital (1881-1887) Table 5a: Revenue Sources and Expenditures for Cleveland City Hospital (1881-1883) Table 5b: Revenue Sources and Expenditures for Cleveland City Hospital (1884-1888) Table 6: Annual Patient Admission Data from Lakeside Hospital (1889-1899) Table 7: Number of Days of Treatment Data for Lakeside Hospital (1888-1895) Table 8a: Revenue Sources and Expenditures for Cleveland City Hospital (1889-1891) Table 8b: Revenue Sources and Expenditures for Cleveland City Hospital (1892-1895) Table 9: Number of Days of Treatment Data for Lakeside Hospital (1898-1901) Table 10a: Revenue Sources and Expenditures for Cleveland City Hospital (1898-1900) Table 10b: Revenue Sources and Expenditures for Cleveland City Hospital (1901-1905) Table 11a: Revenue Sources and Expenditures for Cleveland City Hospital (1906-1908) Table 11b: Revenue Sources and Expenditures for Cleveland City Hospital (1909-1913) Table 12a: Annual Patient Admission Data from Lakeside Hospital (1914-1918) Table 12b: Annual Patient Admission Data from Lakeside Hospital (1919-1924) Table 13a: Number of Days of Treatment Data for Lakeside Hospital (1914-1918) Table 13b: Number of Days of Treatment Data for Lakeside Hospital (1919-1924) Table 14a: Revenue Sources and Expenditures for Cleveland City Hospital (1914-1917) Table 14b: Revenue Sources and Expenditures for Cleveland City Hospital (1918-1922) Table 15: Annual Patient Admission Data from Lakeside Hospital (1925-1930) Table 16: Number of Days of Treatment Data for Lakeside Hospital (1925-1930) %" ACKNOWLEDGEMENTS I would like to thank Ms. Dianne O’Malia and the Stanley A. Ferguson Archives of University Hospitals of Cleveland. I would like to thank Dr. Jonathan Sadowsky, Dr. Kenneth F. Ledford, the staff of the Western Reserve Historical Society, and the Case Western Reserve University Department of History. Without their guidance and efforts, this project would not have been possible. &" The Evolution of Charity Care of the University Hospitals of Cleveland Abstract By RICHARD HENRY CARTABUKE Hospitals are charitable institutions and, as such, should be responsive to those in need of medical treatment. As the ability to afford healthcare becomes increasingly difficult, it is necessary to trace the origins and ways in which hospitals have historically defined and handled their charitable obligations. This paper will examine the development and transformation of charitable care, and those factors that have contributed to the change in charitable care, that University Hospitals of Cleveland has provided from its inception through the twentieth century. The central argument is that, as payment for health services moved away from the patient to third parties, the hospital commitment to charitable care diminished. This trend will be demonstrated using financial and patient data from University Hospitals of Cleveland from 1872 to 1930. In addition, the paper suggests future avenues of investigation with regard to charity care and the University Hospitals Health System. The concept of charity care was the motive for the formation of many early hospitals and continues to be the raison d’être for non-profit hospital organizations and '" healthcare systems. Hospitals have an obligation to aid those in need of treatment with understanding and compassion because hospitals offer life-and-death types of services. It can be argued that it is unfair and morally wrong to deny treatment to anyone when hospitals possess the means to alleviate suffering. Hospitals are also business entities with limited financial resources, which constrain the amount of care that can be delivered. This conflict between charity care and profitability has played an important role in the evolution of the modern hospital system, particularly the allocation and use of public funds. Therefore, it is important to examine the role of charity care. As these institutions have evolved to encompass a host of free services and education that benefit the community, so has the relatively vague definition of charity care. Therefore, the first challenge in evaluating the evolution of charity is to define the meaning of charitable care. The first section of this monograph will explore the rationale for charitable care and select a definition that can be applied to a variety of institutional settings. The need to provide for the medical care of the poor who reside in Cleveland began with the philanthropic efforts of religious groups to deliver health services to the indigent, such as the Society for the Relief of the Poor in the early nineteenth century.1 Over the ensuing one hundred fifty years, Cleveland hospitals have consolidated into two large systems, University Hospitals and the Cleveland Clinic, that dominate the health care landscape, literally and figuratively. The presence of University Hospital Health System (UHHS) has had an enormous impact on the surrounding community. It is difficult to ignore the various buildings, roads, and infrastructure that continue to expand bearing the name of this institution, which includes University Hospitals of Cleveland, """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 1 Encyclopedia of Cleveland History. Hospitals and Health Planning, November 6, 1999, www.wrhs.org/html/philanthropictimeline. (" Lakewood Hospital, Marymount Hospital, Lorain Community Hospital, Deaconess Hospital of Cleveland, Lake Hospital System, and Geauga Hospital. This paper will explore the evolution of University Hospitals using published annual reports made available from the Stanley A. Ferguson Archives of University Hospitals of Cleveland. The analysis is limited because University Hospitals stopped publishing annual reports in 1930, which would not resume until 1956. In addition, the author’s access was limited to published financial data. It would have been useful to review internal memoranda, committee reports and Board of Trustees minutes to determine the strategic decisions that were made during this period. The remainder of the paper will focus on the development and transformation of charitable care and those factors that have contributed to the change in charitable care that University Hospitals has provided from its inception through the twentieth century. The central argument is that, as payment for health services moved away from the patient to third parties, the hospital’s commitment to charitable care diminished. This trend will be demonstrated using data recording the annual number of charitable patients undergoing care compared to the total number of patients treated, the number of days of charitable care provided as a fraction of the total number of days of care, and the income derived from charity patients related to annual expenditures. When the hospital stopped reporting data in this format, it was necessary to develop a surrogate measure of charity care. The amount of income derived from paying patients and third party payers was divided by annual expenditures to arrive at an estimate of charitable care. This was essential because the various sources of income that can be related to charity care often do not distinguish how the funds are distributed. For example, the Cleveland City )*" Hospital, a predecessor of University Hospital, reported income derived from endowment earnings in its annual report, but did not report how much of that income was used for patient care. It is important to ascertain whether the Cleveland community receives the appropriate benefits of charity health care services for the local population commensurate with the financial benefits that University Hospitals receives as a tax-exempt entity. Moreover, this analysis has larger implications for the role of hospitals in health care. The National Coalition on Health Care estimates that forty-four million Americans are uninsured.2 There is an ongoing debate at the federal and state level as to how this can be remedied. The recent prediction that the Medicare trust fund will be insolvent by 2017 indicates that there will be increasing