Your article on the Daughters of Charity National Health System (“Nuns’ Zeal for Profits…,” page one, Jan. 7) seems to suggest that a $2 billion dollar reserve is evidence of greed and a steering off course from the Daughters’ mission to serve the poor. This thesis is absurd and naive.

Any implication of greed on the part of nuns and sisters who choose to live on $40 per month is preposterous on its face. Rather, the sisters take very seriously the public trust and charity with which they live their mission, and are thus careful with profits.

The naiveté is in failing to recognize the current harsh and cutthroat nature of today’s health care market. Hospitals, particularly those that care for the indigent, stand on very shaky ground as payments are capped rather than based on cost, more and more people show up for care with no health insurance at all, and care is shifting from the inpatient to the outpatient setting.

In this environment, any major player must utilize the best and the brightest talent to compete. If the Daughters hire lay persons for part of their financial work, then sobeit. The Daughters, serving in this country since 1823, did not get to be the largest nonprofit healthcare system in the nation by praying a lot and spending down all of their resources. Setting aside $2 billion in reserve makes sense in light of the instability and may actually be more a reflection of investments doing well in a bullish stock market.

The relatively recent takeover of health care by the for-profits has resulted in an all-too-tempting potential for abuse, as these investor-owned healthcare systems must answer first to shareholders, second to patients. Witness the largest, Columbia/HCA, undergoing a massive federal investigation into jaw-dropping allegations of systematic overbilling of Medicare. If for nothing else, the Daughters’ strong sense of mission is a powerful influence on the for-profits to turn some of their profits back into local communities.

To me, your article’s litany of the Daughters’ sound business practices supporting their fiscal acumen is comforting. It reassures me, as a nurse who has practiced at the bedside for 19 years, that the Daughters of Charity will keep an eye on the bottom line, that they will compete and thrive in a turbulent, harsh environment, and that the care I lovingly give to patients will result in profits that are responsibly stewarded and turned right around into my community to serve the poor.

According to tobacco companies’ filings with the Securities and Exchange Commission, Prudential Insurance Company (the largest supplier of health insurance and the largest owner of for-profit HMOs in the United States) has $248 million invested in tobacco stocks; Travelers, $88 million; CIGNA, $77 million; MetLife, more than $15 million.

A July 8 article written by Harvard physicians in the British medical journal Lancet likened this investment strategy to the slogan of a combination veterinarian-taxidermist: “Either way, you get your dog back.”

Some may say, “Morality aside, isn’t this a good investment?” Darn right it is. You figure a pack of cigarettes nets a large profit, has incredible brand loyalty, and it’s addictive. Furthermore, even though 1,000 U.S. smokers die each day from their addiction, the industry recruits 1,000 replacements daily by promoting their wares to children and people in the Third World.

What child could possibly resist the fabulous Joe Camel? Apparently not many. A study of children found that a staggering 91 percent of six year olds identifies Joe Camel as a symbol of smoking, and in the past four years smoking among eighth-graders rose 30 percent.

But to be fair to the HMO investors, they are flooded with profits, have billions of dollars to invest, and “have no choice but to invest in what the Standard & Poor’s index invests in” (according to a CIGNA spokesman in a July 8 Associated Press article). And after all, the market is amoral. Corporations answer to the shareholders, not patients.

Medicare and Medicaid programs are subcontracting to for-profit HMOs, Blue Cross plans (formerly not-for-profit) are selling themselves to investors, and Columbia/HCA (the world’s largest hospital chain) gobbles up hospitals faster than you can say “Philip Morris”.

Let’s face it: America is on a fast track toward becoming the world’s first corporate-run, for-profit health care system. We’re at a crossroads in health care, and the incongruity of the health insurance-tobacco connection epitomizes the collision of values.

I recently attended a forum on healthcare reform at the University of Texas at Austin. Dr. John Howe, president of UT Health Science Center in San Antonio, decried the effects of market-based changes on physician practice. Pharmacist Lee Strandberg discussed healthcare rationing in Oregon. Dr. Ron Anderson from Parkland Hospital lamented adverse market changes on hospitals. Dean Dolores Sands from UT-Austin Nursing School spoke from the heart and deplored the effects on patients and their families.

Last, Dr. Reuben McDaniel, a stately gentleman and professor at the UT-Austin Business School came to the podium and said, “If any of you in the audience were to keel over, I am the only one up here who cannot help you…. Since the medical community allowed costs to sky-rocket out of control, and government attempts at healthcare reform failed, that left business – the insurers – holding the reins. By default, we make healthcare policy and decisions.” What a sobering moment that was.

Be that as it may, it must never be forgotten that health care is a human service, not just a widget to be callously bought and sold. It is wrong for a healthcare interest to encourage and participate in the prosperity of tobacco companies, whose products addict and eventually kill people. Business that profits at the expense of society should at the very least feel our scorn. After all, shareholders and consumers also represent a principled citizenry.

In an era of cost obsessiveness, the medical industrial complex is reorganizing both the delivery and financing of health services. More than half of all American workers are enrolled in prepaid health plans, or “managed care” organizations. Managed care has successfully reversed incentives. Under the dying fee-for-service system, the more a practitioner did for a patient the more money was made. With managed care, the less that is done for a patient the more money is saved. And in fact, health inflation slowed dramatically to just 5.3 % last year, the smallest increase in 20 years.

The philosophy underlying hospital mergers is to create enterprises big enough to prosper in an age when hospital stays are short, and simple surgeries and procedures are performed in outpatient settings. Hospital chains gain negotiating clout with suppliers and contractors and are able to demand steep discounts, are better positioned than independent hospitals to offer a range of services that attracts more patients and doctors, and in some cases control costs by channeling business to the most efficient operations in a region.

Meanwhile the hospital industry’s rush to reorganize has not been seriously challenged by the Justice Department or the Federal Trade Commission. Generally, hospital chains escape antitrust challenge if 35 percent of local marketshare is not exceeded.  In the Austin-area, the merged facilities — South Austin Medical Center, Austin Diagnostic Medical Center, Round Rock Hospital, Bailey Square Medical Center and Specialty Hospital of Austin — comprise about 25 percent of Austin’s 1,600 beds.

Physicians must seek permission for many procedures and are questioned about their treatment plans. Nurses are grossly devalued in hospital redesign as they are replaced by unlicensed assistive personnel who perform tasks, not necessarily provide “care”; traditional health teaching by registered nurses is all but gone. Patients cannot choose their hospital, and their choice of doctor is limited.

The Columbia/HCA-Health Trust merger is supposed to save $125 million annually. What exactly is being done with all the money saved? In 1992, Thomas Frist, Jr., then with HCA, was the highest-paid CEO in the country, making a dizzying $127 million. He will be vice-chairman of the Columbia/HCA-Health Trust merged companies. Austin’s three largest health maintenance organizations–PCA, PruCare, and Travelers — reported $30.8 million in pretax profits last year, more than double that of 1992. Is this managed care or managed money?