Nov 14, 2019

Another reality check on hospital beds

A woman speaks near a large white screen that displays the blue and pink logo for Mount Sinai Health System.

Mount Sinai sponsored an NYC luncheon in 2015. Photo: Cindy Ord/Getty Images for Mount Sinai Health System

Hospital beds are not filling up like they used to, but that does not mean hospitals want their beds to be empty.

What they're saying: Even though more patients are being treated in outpatient clinics rather than hospitals, "we'll still be able to keep our beds pretty full," Don Scanlon, chief financial officer at Mount Sinai Health System, said this week at an investor lunch held at Goldman Sachs headquarters in New York City.

Details: Mount Sinai, a not-for-profit hospital system based in Manhattan with $5 billion in annual revenue, is preparing to sell $475 million in bonds, and was making its pitch to bondholders about why buying that debt would be a good deal.

  • Goldman is the lead underwriter of the deal. Richard Friedman, co-chair of Mount Sinai's board who has donated millions to the system and has his name on its brain research center, is the leader of Goldman's merchant banking division.
  • Mount Sinai did not respond to questions about whether the organization believed this relationship was a conflict of interest.

Between the lines: Mount Sinai's discharges have trended down, but the hospital doesn't want to lose the bigger dollars tied to inpatient stays. And the system wants to reassure municipal investors they will see returns.

  • As a result, Mount Sinai has invested more money in outpatient centers in other parts of New York that serve as "feeders" for its main city hospitals, Scanlon said.

The bottom line: Mount Sinai, Trinity Health, Banner Health and a host of other hospital systems have openly touted plans to boost or retain admissions even though they say they want to keep people out of the hospital. This is a fundamental disconnect between "value-based care" and the system's financial incentives.

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