The American Hospital Association is once again in conflict with Arnold Ventures LLC, a billionaire-backed organization that the AHA accuses of spreading misinformation about hospitals.
Arnold Ventures LLC, formerly known as the Laura and John Arnold Foundation, was founded by billionaires John D. Arnold and Laura Arnold in 2010. Mr. Arnold is an ex-energy trader and became the youngest billionaire in the U.S. in 2007 at age 33. The couple transitioned their philanthropic organization to an LLC in 2019.
Over the past 12 years, Arnold Ventures has awarded more than $358 million to research and initiatives focused on healthcare, including grants to study hospital consolidation and fund litigation against health systems. The LLC helped fund Fairmark Partners, a group pursuing antitrust lawsuits against hospital operators in Wisconsin, Connecticut and North Carolina.
Most recently, Third Way, a self-described "national think tank that champions modern center-left ideas," published a report on Aug. 15. The report argues that "hospitals persistently spread the myth that they are losing money on Medicare to justify large markups to patients with private coverage."
The report contrasts Duke Regional Hospital in Durham, N.C., with Mercy Hospital Southeast in Cape Girardeau, Mo., claiming the former is efficient and profitable on Medicare while providing better patient outcomes, while the latter struggles with cost control and delivers worse care at higher prices.
Although the name Arnold Ventures LLC is not directly mentioned in the report, it does cite sources like the Lown Institute and the National Academy for State Health Policy, both of which have received funding from Arnold Ventures.
On Aug. 16, the AHA issued a response condemning the LLC and the Arnolds, arguing that it was no surprise the Third Way report reached its conclusions due to the "highly flawed data and methodologies developed through other Arnold-funded work."
"Unfortunately, instead of using their immense wealth to truly understand the issues driving health care costs and the broad impacts on American society, the Arnolds have recklessly bought into and are working to advance an inaccurate narrative of hospitals," the AHA said.
"Part of this strategy includes pumping more than $100 million into think tanks, academics, public speaking sponsorships, political activities and the like, as well as encouraging these advocates to drive a wedge between different hospitals to advance their policy agenda at the state and national levels."
The AHA also pushed back against the Third Way report's assertion that break-even margins indicate healthy financial management for hospitals, a concept it has challenged in recent years. "No organization in any field can operate by simply breaking even," it said.
Becker's reached out to Arnold Ventures LLC for comment:
"Americans deserve affordable, high-quality care, and we at Arnold Ventures are committed to research for solutions that deliver for them. We hold no preconceptions, rather we follow rigorous standards for research and data to support policies that have the greatest potential to work for affordability, quality, and access," Mark E. Miller, executive vice president health care at Arnold Ventures, said in a statement.
"Of course, hospitals are essential — and some are doing well and others are not," Mr. Miller said. "We stand against bad actors who abuse the system to enhance their own profits and in so doing make it harder to engage in a constructive discussion of solutions that would help all hospitals."
Last summer, a study backed by the LLC and published in Health Affairs found the cash reserves of nonprofit hospitals grew 68% from 2012 to 2019 while charity care spending dropped. The AHA disputed these findings, arguing that the study's methodology failed to capture the full cost of providing care and overlooked the broader community benefits offered by hospitals.
Read the AHA's response in full here.
Find the Third Way report in full here.