HCA doctors say its cost-cutting is endangering Appalachian patients — a warning for the whole U.S. health care system

ASHEVILLE, N.C. — There was the beeping of monitors, the stiff sheets, the sterile smell of the hospital room. Mostly, there was pain. Sharp, relentless pain.

Mike Messino was recovering from a successful surgery, but the nerve blocks had worn off. He spent two full hours waiting for a nurse to inject pain medication. When he’d worked in this hospital, he’d made sure patients didn’t wait longer than 15 minutes for that kind of care.

But things are different now that the country’s biggest hospital chain, HCA Healthcare, owns Mission Hospital in Asheville and five rural hospitals scattered across the Blue Ridge Mountains of Western North Carolina. It’s not the nurses themselves — there simply aren’t enough of them anymore.

“It’s not as safe as it was,” said Messino, an oncologist whose namesake Messino Cancer Centers staffs the hospital. He said the loss of nurses and support staff means that critically ill patients may not get checked on enough. Family members may need to help them to the bathroom. Rooms may not get cleaned as often. Phones may not be answered.

Messino considers himself lucky, considering the horror stories he’s heard about care in the hospital since 2019, when HCA came in. A young person with asthma going into respiratory failure in the waiting room. Ambulances lined up for hours before they can drop people off. Cancer patients missing lifesaving chemotherapy doses.

It’s all happening, 10 doctors who either work or used to work at Mission and a current Mission nurse told STAT, because many of their colleagues quit, driven away by punishing working conditions, unsafe environments, and low pay. It’s starkest in oncology — every medical oncologist hired by HCA has quit; none has been replaced. The region’s largest outside practice also stopped providing inpatient chemotherapy to certain patients in September, deeming it unsafe. ER docs, too, describe chaotic situations in which patients’ conditions deteriorated while they waited. In total, more than 200 doctors have stopped practicing at Mission since HCA took over, according to a local media report.

Mission’s former CEO said devastating cuts were in store regardless of its owner. Being in rural Appalachia, many patients are low-income and uninsured, and the state hadn’t expanded Medicaid. A single, dominant health insurer refused Mission’s requests for price increases.

In many respects, HCA is simply doing what it does best: making money. And it’s doing so from the driver’s seat of a monopoly that state lawmakers created long before the hospital giant came to town. The deal to buy Mission came with few guardrails, allowing the company to freely and promptly roll out its trademark cost-cutting playbook.

Responding to STAT’s questions in an emailed statement, HCA disputed that the Mission facilities are short-staffed. Spokesperson Nancy Lindell said “we have about as many providers on our medical staff today as we did prior to the acquisition.” She added that the “quality of care we provide is confirmed by the national recognition we have received from independent patient safety and quality rating organizations.” The company declined to make any Mission officials or providers available for an interview.

But the mass exodus of clinicians is crescendoing into an open revolt against HCA. Messino and more than 120 other local doctors, including nine former Mission chiefs of staff, blasted HCA’s changes as “devastating” at a dramatic community meeting last month, a rare public rebuke that was met with applause. They’re joined by an army of patients, residents, and local leaders who’ve spoken out about the deteriorating quality of care there. Just days after the doctors’ letter, the state’s attorney general threatened to sue HCA if it doesn’t correct the shortcomings.

It’s a stunning fall from grace for Mission, a formerly nonprofit system with a reputation for quality that once drew esteemed doctors from across the country. But experts emphasized that it is also the inevitable outcome of an antiquated delivery system that incentivizes wildly expensive services in brick-and-mortar hospitals rather than primary care, telehealth, or other innovations that could lower costs. Big-name hospital systems around the country are grappling with a stark reality: If they don’t adapt, they’ll collapse from within.

Mission is a warning of what’s to come.

“The lesson here is for every hospital executive to recognize that they’re the frog in the slowly boiling water,” said Barak Richman, a law and business administration professor at Duke University. “They have to figure out how to jump out of the pot.”

A staffing crisis

Every hospital is undergirded by an army of unsung workers who make the trains run on time. Without them, or enough of them, the whole thing falls apart.

That’s what many doctors describe happening at Mission Hospital, a hodgepodge of buildings somehow both contemporary and rustic, much like Asheville itself. Most complaints center on this hospital, although people claim care has also declined at some of the smaller ones, too. Soon after HCA took over, they say scores of nurses, medical assistants, technicians, social workers, and housekeepers left. Many went voluntarily for better pay and working conditions elsewhere, according to the doctors who spoke with STAT. In other cases, like with secretaries, support nurses, and discharge planners, they said HCA cut positions.

Eventually, doctors quit, too, because they said the lack of support staff made their jobs untenable and patient care unsafe. Others, especially primary care doctors and hospitalists, said they left after HCA offered them new contracts that would have meant less pay, prompting them to leave. There have been similar reports in other communities where HCA took over nonprofit hospitals.

“I loved Mission: the hospital, the medical staff, and the nursing staff I worked with,” said Scott Joslin, who led Mission Hospital’s hospitalist group for more than two decades before he quit in January. “But there was just so much turnover and so much turmoil. It came to a point for me that I just felt I couldn’t deliver the care that I wanted to deliver.”

It’s impossible to know precisely how many people left and how many have been replaced. Even though HCA says the staff is about the same size it was previously, clinicians interviewed contend many of the replacements are temporary doctors and nurses who work part time. HCA’s count also includes outside doctors who see patients in the hospital. Lindell would not share breakdowns of employed versus contract staff, and said in an email that those distinctions are “irrelevant to anyone besides the provider and their employer.” She said leaders review staffing every four hours, and maintained that Mission pays competitive wages and benefits, including $20 million in raises to direct care staff last year.

Lindell also pointed to a rebuttal letter signed by 82 Mission doctors that said patients receive excellent care. To suggest they’re not, the letter said, “is offensive to those physicians and advanced practice providers who are showing up every day.”

The staffing issues are particularly dire in oncology. All five medical oncologists HCA hired to work at Mission Hospital in 2020 and 2021 have quit. The longest tenure was three years, and the shortest was seven months. Now, Mission relies exclusively on the outside group Messino founded, 15-doctor Messino Cancer Cancers, to provide medical oncology for its patients, and even that relationship has been rocky. Messino, the group’s founder, described contentious contract disputes that preceded HCA.

Medical oncologists diagnose patients with cancer, create their treatment plans, and follow them for years in remission. They’re like the primary care doctors of cancer; most people with cancer see one. Medical oncologists are different from subspecialty oncologists, which Mission still does employ, who specialize in things like performing surgeries or delivering radiation. For example, Lindell said Mission recently hired two head and neck surgeons and a breast medical oncologist, some of whom provide services that weren’t available previously.

One of the medical oncologists who quit explained that the conditions had become unsafe because of a lack of nurses and other support staff. “I left because I couldn’t in good faith take care of patients somewhere that I didn’t think was safe. Giving chemo is a big deal. Safety is paramount, and it just wasn’t a safe place to do it,” said the oncologist, who still works in health care and asked to remain anonymous because of concerns about retaliation.

Oncology nurses should be assigned to just three or four patients getting chemotherapy, but that’s currently five or six at Mission Hospital, said Martin Palmeri, a medical oncologist with Messino Cancer Centers who heads the Asheville hospital’s oncology service line. Mission’s Lindell said nurse-to-patient ratios change based on patient acuity.

There’s now only one chemotherapy-trained pharmacist when there had been four, said Palmeri, who’s worked at the hospital for a decade. That means the pharmacists double-checking the work are often not chemotherapy trained, Palmeri said. On nights and weekends, the pharmacist preparing the drugs often does not have chemotherapy-specific training, he said.

That’s why Palmeri and his colleagues will no longer provide inpatient chemotherapy to complex blood cancer patients at Mission Hospital. Unlike other cancers, treating these requires wiping out the immune system. A simple infection could be deadly; a fever could kill them within hours. It’s imperative that nurses regularly check their vital signs, and Messino’s doctors weren’t confident that would happen, Palmeri said.

“We were finding more and more cases of missed care and errors,” he said. “We were catching them, but it was one of those things where it was just a matter of time before something was going to slip through the cracks and someone was going to get hurt.”

Although Messino’s doctors provide most of their care in outpatient clinics, roughly 40 patients with complex blood cancers will now have to travel hours away for treatment. These patients have to stay in the hospital for a month, Palmeri said.

The Asheville hospital’s emergency department is having many of the same problems as oncology. Emergency physician Allen Lalor agreed the nurse-to-patient ratios are the most obvious change he noticed after HCA took over. Then more patients were sent to the emergency department from Mission’s rural hospitals. Suddenly, there were a lot more patients and too few nurses to treat them, Lalor said. He watched experienced nurses, certified nursing assistants, transport technicians, and others quit to escape the stress.

Sometimes, he said patients had to wait to be admitted even though there were empty beds. There just weren’t enough nurses to staff them.

“Working in the ER was hard, and it was much harder after HCA,” said Lalor, who quit in 2022 and then filed an unsuccessful whistleblower lawsuit against HCA.

HCA blames the ER waits on the state’s attorney general, who turned down the company’s request to add more inpatient beds to the Asheville hospital. But nurses and others claim that a lack of beds isn’t the problem, it’s having enough people to treat those patients.

Doctors also pointed to a crisis in the department of Mission Hospital that cleans, inspects, and sterilizes medical devices before surgeries. They said it’s happening because the low-paid technicians who do that work are leaving. One day, Mission urologist Brian Cohen said half his surgeries were called off because there weren’t enough clean instruments. Afterward, Cohen was miffed when administrators didn’t reach out to address the issue.

“For the disaster that the operating room was, for there to be no communication at all from the CEO and the COO? Not one communication? That is pathetic. It’s poor leadership,” Cohen said.

Lindell said there was a two-day period in August where surgeries were rescheduled, but none were canceled.

Cohen will leave his post in January after he said HCA issued him a notice of termination without cause. He suspects it’s because he’s paid a lot.

HCA is also making major changes in primary care. When Mission was a nonprofit, primary care was integral to the system’s offerings. HCA has rolled out new contracts that primary care doctors say would have paid less — HCA’s way of getting rid of them, they alleged. Entire clinics quit en masse after the contracts were introduced, some of them opening new facilities with a competing health system.

Most of the roughly 60 hospitalists who worked at Mission Hospital pre-HCA have quit, too. Joslin, who led the team, said he was the fiftieth to leave. Many did so early on when HCA switched to a new compensation model they didn’t think would pay them enough. Lindell said HCA uses national data to ensure its employed physicians are paid fairly and in compliance with applicable laws. She emphasized that the number of hospitalists on the medical staff is approximately the same as before HCA, but declined to give a breakdown of how many of those replacements are full-time employees.

Other hospitalists left after HCA stopped letting them directly admit patients from community hospitals, Joslin said. Instead, those patients had to first present to the ER. Not only was the ER already strained, patients that Joslin’s team had admitted would sometimes get sent back without the physicians’ knowledge to the waiting room, where their conditions deteriorated. For example, he said an asthmatic patient went into respiratory failure and a diabetes patient with life-threatening ketoacidosis stopped receiving insulin.

“It’s completely unacceptable,” said Joslin, who now works as a hospitalist at the local VA. “They promised they wouldn’t [send patients back to the waiting room] again, but it kept happening anyway. It was very demoralizing.”

North Carolina Attorney General Josh Stein is investigating the same staffing issues that doctors called out in their conversations with STAT. He’s demanded documents about canceled surgeries and about the surgical equipment sterilization, and in October, he sent formal notice that HCA had breached a stipulation in its agreement to buy Mission that requires it to maintain “services” for 10 years. He called out oncology and emergency care in particular. If the company doesn’t correct the lapses, the attorney general has pledged to sue.

An attorney for HCA replied that the AG’s office does not have a statutory right to investigate its compliance with the agreement, and that the demand was a “bald attempt to obtain pre-litigation discovery.” HCA maintains it’s in full compliance with the agreement.

A prevailing sentiment among doctors STAT interviewed was that they didn’t and don’t feel supported by HCA. They don’t feel like their expertise — informed by working here for three, four, even five decades — is valued.

“We’re good at providing care to this disenfranchised, rural, Appalachian population,” said Palmeri, the oncologist. “Listen to the experts who’ve been providing care here for 30 years and say, ‘What can we do to make this successful for you?’ When you hear feedback from doctors on how to improve things, listen to it. Don’t just stick to the corporate playbook.”

Precisely the opposite message was on stage at HCA’s annual investor day in Nashville, Tenn., earlier this month, where executives boasted about the company’s ability to work with doctors, to listen to them and help them grow in their careers.

“We give them a voice,” said Tim McManus, HCA’s national group president. “We’re less bureaucratic. And physicians love that.”

‘Doing well for a reason’

There’s a lot of doom and gloom in the hospital industry. Expenses keep ballooning even as the money coming in stays largely the same. But HCA seems impervious to the upheaval.

The Nashville-based company drew $5.6 billion in profit in 2022 after pocketing another $10.7 billion over the first two years of the pandemic. HCA has north of 180 hospitals and $60 billion in annual revenue. Its stock has outperformed the S&P 500 over the past five years, making it the darling of health care investors and analysts.

“They’re doing well for a reason,” said Ge Bai, an accounting and health policy professor at Johns Hopkins University. “Their primary goal is to maximize shareholder value, and they are finding different ways to enhance their revenue.”

HCA closely guards its secret sauce for outperforming under such tough circumstances, but industry insiders say it’s actually quite simple: cut costs — mostly from the biggest line item, labor — and charge more. The company also chooses dominant hospitals in growing markets, especially in Florida and Texas, where many people have commercial insurance.

Another way HCA makes money is by charging some of the highest list prices in the country. Last year, HCA’s charges for services were nine times the cost of delivering them. The national average is closer to three times. Since buying Mission, HCA has spiked prices to be more in line with the rest of its hospitals.

Insurers typically pay a negotiated rate that’s a fraction of those list prices, but they’re still important because they’re a starting point in those negotiations, said Morgan Henderson, a principal data scientist at The Hilltop Institute at UMBC, a health policy research center.

“This potentially gives them more leverage at the bargaining table with insurers,” Henderson said.

There’s not a lot that Mission’s supporters can really do about HCA’s changes. The company’s decisions are governed by a contract that it signed as part of the sale, and it must report to an independent monitor who assesses compliance — but that agreement doesn’t hold HCA to any quality or staffing metrics for the hospital.

Experts said that’s par for the course when it comes to agreements governing the conversions of nonprofit hospitals into for-profit entities. Such contracts tend to stick with metrics that are easily measured, like spending on building improvements and free care. Agreements must be vague to account for uncertainty around what health care services might be needed in a decade, said Jill Horwitz, a professor at the UCLA School of Law. They can’t require a certain number of beds staffed in a certain way because hospitals need flexibility in case of, say, a pandemic.

HCA’s critics say the vague contract is a major problem.

“The contract does not require HCA to do anything other than check the box,” said Mark Weinstein, a former board member at the Brevard hospital who resigned out of frustration.

The agreement does say HCA must continue providing key services like surgeries at the Asheville hospital and five smaller, outlying hospitals, but it defines surgeries as “procedures that require one or more incisions.”

But here again, the language in the contract is broad. It says HCA “shall not discontinue the provision of the services.” Discontinue is not defined, so it’s unclear whether it’s OK to close a department or shut down a service for weeks or months. It’s unclear whether the obligation to provide oncology treatment at Mission Hospital means it can’t stop treating a certain type of cancer.

HCA also has to continue providing free and discounted care to low-income patients, known as charity care, but it can do so according to its own policy; there’s no minimum amount. What’s more: HCA does not have to publicly report that spending.

HCA says its new charity care policy is more generous than when Mission was a nonprofit, but two charity care experts at The Hilltop Institute who reviewed both said the new policy contains restrictions they had never seen before. For example, HCA’s policy only applies to emergency care, whereas Mission’s covered medically necessary services, which could include primary care and outpatient surgery. And most patients only qualify for charity care if their bills exceed $1,500. HCA’s policy says it will cover smaller bills if there are “extenuating circumstances” and the patient makes less than 200% of the federal poverty guideline, or about $29,000 for an individual.

“$1,500 is a lot for someone in one of those very low income ranges to cover right off the top,” said Cynthia Woodcock, Hilltop’s executive director.

There may be lessons for Mission in HCA’s 2003 purchase of another nonprofit system in Kansas City called Health Midwest. People there also say care has gone downhill since the takeover, and they have accused HCA of failing to deliver on its similarly vague promises.

In the case of Health Midwest, a judge found HCA failed to follow through on its pledges to spend a set amount on badly needed upgrades to existing facilities and to maintain the same level of free, discounted, and unreimbursed care. Kansas City Circuit Judge John Torrence, who presided over the case, wrote that HCA’s reports detailing that spending were “full of errors, inconsistencies, and double counting.”

“The numbers were very squishy,” Torrence said in an interview. “I don’t think they ever anticipated the lawsuit happening. When it finally did, let’s just say the financial records were not that good.”

The Mission deal, like the Health Midwest one, also requires HCA to spend a certain amount on capital improvements, which the independent monitor says it has done. The company had to correct two of its annual spending reports after it initially included expenses that were not supposed to be counted toward that total.

HCA has been sued for squishy numbers in the past, too. The company paid $1.7 billion in the early 2000s after the federal government joined eight whistleblower lawsuits accusing it of fraudulent billing and illegal kickbacks to doctors for referring to its hospitals. The lawsuits described HCA as keeping essentially a secret set of books that detailed claims the company knew were improper but still filed with Medicare.

The winning bid

Many of the people appalled by Mission’s current state blame it on one man: Mission’s former CEO, Ron Paulus, who fiercely championed the sale to HCA. He keeps a low profile these days, but in interviews leading up to the deal, he described Mission as being boxed into a corner.

The problem was partly demographics. Asheville is a well-to-do mountain town loved for its breweries and scenic views. Outside the city limits, rural Appalachia stretches for counties in either direction. Three-quarters of Mission’s patients either relied on government insurance or couldn’t pay at all, Paulus said at the time. Paulus declined comment for this article. Things really came to a head when Mission lost its fight for a pay increase with the region’s dominant insurer, Blue Cross and Blue Shield of North Carolina.

Many of the problems that led Mission’s board to sell to HCA are more universal, hospital finance experts told STAT.

Conventional hospitals like Mission’s are expensive to run. Surgeons and administrators demand high salaries. Fancy equipment is costly. That’s why academics and consultants are pushing the idea that the industry needs to think outside the box. It’s not exactly clear what it looks like on the other side, but it’s clear what’s happening now isn’t working.

“We need to be thinking about new ways of envisioning a future that are not defined by how many beds you control,” said Paul Keckley, a longtime industry consultant who splits his time between Asheville and Nashville.

Hospital systems like Mission run on what’s known as a hub-and-spoke model, where the sickest patients are funneled into the mothership, the Asheville hospital. Profit-focused companies like HCA put that model on hyperdrive: less emphasis on primary care, more on revenue-generating procedures. It’s not clear that a nonprofit buyer would have behaved much differently.

When hospitals are caught between a low-income patient population and a dominant insurer, there are bound to be harsh tradeoffs, said Gregg Bloche, a law professor at Georgetown University and health care advisor to former President Barack Obama.

“There can be a strong temptation to say there are evil actors and good actors,” Bloche said. “But if we’re talking about a lower-paying environment overall, then we’re going to be talking about lower-quality health care provided by these hospitals, whether they’re for-profit or nonprofit.”

Eventually, Paulus would convince the board that Mission’s financial viability hinged on selling to an outsider. He explained that HCA was the best bet because it had the scale to buy supplies for cheap, the technology to do predictive analytics, and — ironically — clinical capability in oncology. There was also the matter of the sale’s $1.5 billion in proceeds flowing into a nonprofit foundation, all earmarked for health improvement programs. That foundation, Dogwood Health Trust, had trouble getting off the ground, but is spending the money on badly needed initiatives like affordable housing and early childhood education.

Doctors say they weren’t surprised Mission was being sold, but they were surprised HCA was the buyer. They expected, and would have preferred, another nonprofit system in North Carolina.

For his part, Joslin, the hospitalist, said he thinks Paulus wanted to find the best solution possible. State lawmakers’ decision not to expand Medicaid in North Carolina was devastating for Mission, he said.

“I believe [Paulus] truly came to understand that Mission’s long term viability in the absence of that expansion doomed us to eventual bankruptcy,” Joslin said.

Mission’s leaders solicited an offer from HCA months before its board formally authorized Paulus to find suitors, according to the Asheville Watchdog, a local news outlet. The board allowed just one other bidder to make a formal presentation, and it was quickly rejected. Mission’s board voted unanimously in favor of selling to HCA.

That raises the question of whether Mission’s board truly had a competitive bidding process, said Rex Burgdorfer, a partner with the consultancy Juniper Advisory. “If you don’t have a basis of comparison to evaluate company A versus B versus C, your ability to make a fully informed decision is compromised.”

If there’s a lesson here, it’s that hospital boards must have independent judgment and not just follow their CEO, said Keckley. He said he spoke with Paulus and Mission directors leading up to the sale, and he believes the board was led to the conclusion it drew.

“There really wasn’t a process that allowed for a view of all the options for Mission,” he said. “It was orchestrated that it would go this direction and HCA was prepared with the money.”

It’s easy to understand why HCA wanted Mission. The nonprofit system was formed through the 1995 merger of Asheville’s two competing hospitals, which then added outlying hospitals. Usually, to preserve competition, the federal government doesn’t let a city’s only two acute-care hospitals merge. To get around that, North Carolina’s lawmakers passed a controversial type of law called a Certificate of Public Advantage, which provides immunity from an antitrust lawsuit.

COPAs effectively allow monopolies, but the state regulation is intended to keep them on a short leash. In Mission’s case, lawmakers imposed limits on profit, prices, and how much of an area’s doctors it could employ. Importantly, it could not be owned by a for-profit company.

The merger that formed Mission was the first mistake, said Duke’s Richman. Putting one operator in charge of all the hospitals takes away the incentive to fix things and keep costs down. That’s especially harmful when the operator is a brick-and-mortar delivery system that’s already wildly expensive to maintain, Richman said.

On his first day as CEO, Paulus said he asked lawmakers to scrap the COPA rules. He got his wish six years later, in 2016, and the HCA offer came in less than a year later. After the deal closed, Paulus went on to become a strategic adviser for HCA. Today, he runs a tech startup in the Los Angeles area, where his $5 million condo walks directly onto the Pacific Ocean.

A busy retirement

You encounter equal parts anger and grief talking to doctors in the quiet towns that hug the Blue Ridge Mountains right now. Many of them came here fresh out of school and never left, fortifying a commitment that doesn’t speak the language of corporate earnings and stock prices.

Some of them, like Messino, are now retired. For them, watching HCA’s takeover feels like watching their life’s work get dismantled. They’re putting the energy they once used to treat patients into convincing HCA to do right by them.

The doctors are hardly alone in pushing back. The cities of Asheville and Brevard, along with their respective counties, have accused HCA in a lawsuit of using its monopoly power to drive up health care costs.

It isn’t the retirement that Messino expected. These days, the 70-year-old oncologist, bespectacled with side-swept white hair, is working harder than ever. He speaks at public meetings, writes letters, and meets with government officials. In a perfect world, he’d like to see HCA leave town, similar to what happened with the hospitals it managed in Oklahoma City.

Messino is mostly advocating for patients, but also on behalf of the doctors who are slammed with their work, and who fear retaliation from HCA. Before Mission sold to HCA, Messino was one of them. Now, he regrets that. He wants to play a more active role in making sure patients get good care here, in the area he loves, that’s been good to him.

In fact, his advocacy might even extend to other states. Lately, he’s been fretting over the news that a Catholic hospital in New Hampshire might sell to HCA.

“I just want so badly to know a doctor up there that I could call and warn,” Messino said.