The National Council of Senior Citizens said yesterday that the nation's 1,300 for-profit hospitals have higher costs and charges than nonprofit hospitals, provide negligible free care to the poor and offer medical care "inferior to that in the nonprofits."
The council also charged that the government has been subsidizing the growth of for-profits at the expense of nonprofit and teaching hospitals, using a variety of bookkeeping rules, Medicare payment provisions and payment of a guaranteed return on equity to for-profit institutions treating Medicare patients.
When a nonprofit hospital "is acquired by a for-profit hospital corporation, costs and charges to patients increase rapidly," said the council, whose report was based on studies by health economists over the past few years.
The Federation of American Health Systems, the umbrella group of the for-profits -- about one-sixth of the nation's hospitals -- called the report a "one-sided rehash and compilation of every negative study they could find, without any attempt at reaching a balanced view by considering counterstudies that contradict the old material they have put together."
"Selective use of data and misstatements of fact" made the report a "case study in egregious irresponsibility," the federation said.
Foundation spokesman Thomas G. Goodwin said the report did not cite a single study to back up its contention that for-profits provide inferior care and that it ignored a recent study that found almost no differences in quality of care.
The council, among its recommendations, said federal, state and local governments should take steps to slow acquisition of nonprofit hospitals by for-profit corporations, change bookkeeping rules to eliminate subsidies to for-profits and institute a system of subsidizing public and other nonprofit hospitals for their charity cases, teaching and research.
The report said one study in California showed that for all hospitals, room-and-board operations generally were unprofitable, as were blood banks, radiology units, home health services and emergency rooms. But clinical labs, pharmacies and inhalation therapy were profitable for all.
The senior citizens council said for-profit hospitals in the California study were found to use 10 percent more clinical lab services and 50 percent more pharmacy services per admission than nonprofits, and to generate more inpatient admissions from emergency room patients.
The report cited a Blue Cross-Blue Shield study in North Carolina, which found that for-profit charges in various categories, such as cholecystectomy (gall bladder surgery), hysterectomy and normal birth delivery ranged from 6 percent to 58 percent higher than at comparable nonprofit hospitals.
It cited a study by the Florida Health Cost Containment Board, which found that in 1983, 32 percent of the state's public hospitals provided a high level of uncompensated care to the poor, according to standards set by the board. It also found that 14.6 percent of private nonprofit hospitals provided a high level of such care, but only 7.4 percent of the for-profits did.