Charlotte: Healthy hospitals
While politicians and patients rail about health care reform and rising costs, Charlotte’s two dominant hospital systems are raking in serious dough. Novant Health and Carolinas HealthCare System have earned a combined $2.9 billion over the last five years, including $942 million in 2016, according to their financial reports. The profit includes investment gains, which were robust last year amid a frothy stock market.
“There’s a very simple explanation for [the profitability]: Monopoly power,” says Duke University economist Barak Richman, who studies health care finance.
CHS has a 52% market share of hospital stays in the Charlotte metropolitan area, according to a Standard & Poor’s report in September. Having consolidated various
hospitals and physician practices across central North Caro-lina, the two organizations had combined revenue topping $13.5 billion last year.
Winston-Salem-based Novant reported record results after repaying $350 million in debt, issuing employee bonuses totaling $83 million and providing charity care and other community benefits of $725 million, according to a press release. In addition to Mecklenburg County, Novant operates hospitals in Forsyth, Brunswick and Rowan counties and Manassas, Va.
CHS’ market dominance is a factor in an antitrust lawsuit filed last year by the U.S. Department of Justice and N.C. Attorney General (“Picking up the beat,” March). The suit contends the hospital’s practices involving contract restrictions with insurers generate higher costs and fewer options for patients. The system says it hasn’t violated antitrust laws, but an attempt to have the case dismissed was rejected by a federal judge in April.
“Monopolies in health care cause undesirable redistribution of wealth and inefficient allocation of resources, both of which burden consumers at levels beyond those of other monopolists,” Richman said in a 2012 study.
Both organizations are not-for-profits governed by boards of local business and civic leaders. The systems provided more than $2 billion in financial assistance to needy patients, uncompensated care and other community benefits in 2016.
Financial strength enabled Novant to make significant investments in its staff “as the health care industry continues to struggle with provider and nurse shortages across the country, as well as an ever-changing environment,” Chief Executive Officer Carl S. Armato said in the release.
CHARLOTTE — Dollar Express will lay off 138 local workers, many at its corporate office, after deciding to close all 323 stores by June. The discount retail chain was formed when Matthews-based Family Dollar was acquired by Dollar Tree, based in Chesapeake, Va., in 2015. Affected jobs include managers and customer service representatives.
CHARLOTTE — Sealed Air will sell its Diversey Care cleaning-products division to Boston-based Bain Capital for about $3.2 billion. The unit had sales of about $2.6 billion in 2016, about a third of the company’s total revenue. The deal is expected to close in the second half of the year.
HUNTERSVILLE — American Tire Distributors named Bill Williams chief financial officer. He comes from Randstad Holdings, a Netherlands-based human-resources consulting firm, and previously worked for IBM, Martin Brower and Kraft Foods. The supplier of replacement tires has more than 5,000 employees and 140 distribution centers in North America.