Audit Roundup: WSJ Digs into Hospitals

Paper continues to be great on the issue; Journal's other smart angles today; etc.

The Journal has some smart stories today, including the continuation of its excellent reporting on nonprofit hospitals acting like for-profit companies.

Ascension Health, the country’s largest nonprofit hospital system, says its mission is to serve all, “with special attention to those who are poor and vulnerable.” But in this city, where one in four people don’t have health insurance, it’s become harder for the poor and vulnerable to find Ascension.

Last year, Ascension’s local subsidiary closed Riverview Hospital, the third hospital it has shut down in Detroit in the past 10 years and the only hospital that remained on the city’s blighted east side. Meanwhile, 30 miles away, in a suburb of multimillion-dollar homes, Ascension is opening a new $224 million hospital.

Ascension’s approach to the Detroit market is an increasingly common strategy among nonprofit hospital systems: Close money-losing facilities in poor areas where a large share of patients are uninsured, and build or refurbish hospitals in affluent places where people have private insurance coverage.

If you act like a for-profit, you ought to pay taxes like one.

The paper also takes a look at how some of the biggest hedge funds are scared enough to have most of their money in cash.

And it writes writes that Wall Street is ticked off at McCain for running against them—so much so that he had a hard time filling a Manhattan ballroom for a fundraiser tonight. They’re peeved at the oddity of hearing a Republican running so fiercely against corporations.

Two days later, on Sept. 24, tensions heightened when Sen. McCain, who had come to New York for the United Nations session, met with key business supporters, including Cisco Systems’ CEO John Chambers, retired E-Bay CEO Meg Whitman and private-equity guru Henry Kravis. The campaign invited these executives just the night before to show up at the Manhattan hotel for an emergency meeting.

After the media left a photo op with the group, the financiers gave Sen. McCain an earful. Some of them warned him against getting personal and making Wall Street the scapegoat for the nation’s troubles.

Sen. McCain’s continuing broadsides against business have damped his ability to raise money for the Republican Party.

Steven Pearlstein in the Post eviscerates Wall Street for its inaction in the crisis.

There’s a word that captures the instinct to take these kind of bold moves in the midst of a national crisis — it’s called leadership. We’ve seen quite a bit of it these past few weeks from public officials like Hank Paulson, Ben Bernanke, Tim Geithner, Sheila Bair, Nancy Pelosi, Barney Frank, John Boehner — even George Bush. Wall Street, by contrast, has served up a nothing sandwich, a lack of leadership that’s been stunning.

The NYT takes a nice historical look at government interventions of the past.

The government’s plan is an exceptional step, but not an unprecedented one. The United States has a culture that celebrates laissez-faire capitalism as the economic ideal, yet the practice strays at times. Over the last century, the federal government has occasionally taken stakes in railways, coal mines and steel mills, and has even taken a controlling interest in banks when it was deemed to be in the national interest.

The corporate wards of the state typically have been returned to private hands after short, sometimes fleeting, stretches under federal stewardship.

Bloomberg reports some happy economic news: more manufacturing jobs are staying here rather than going to China, because of the weak dollar.

With costs in Alabama running 3 percent below those in China, Exxel is cutting production at a joint venture in Shanghai while hiring workers, adding machines and increasing output at the 250,000 square-foot plant. This year, for the first time, the company will make more bags in the U.S. than abroad.

Now all of a sudden Citigroup is back on shaky ground, according to the NYT’s Andrew Ross Sorkin.

For a brief, shining moment, Mr. Pandit looked like the new Jamie Dimon, the banking rock star who runs JPMorgan Chase. Then, in a blink, some thought he looked more like a Keystone Cop…

Wells Fargo, which had lost the original auction for Wachovia, came back with a surprise bid of $7 a share. Wachovia accepted that superior offer after a series of court hearings.

But the Wachovia deal was more important for Citigroup than many investors realized. Indeed, in parts of Washington and Wall Street, some whispered that the Citigroup-Wachovia tie-up was actually a backdoor bailout for Citigroup, not just Wachovia.

Finally, hell freezes over: Paul Krugman is lauded on the WSJ edit page.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.