If you are a for-profit entity, you are supposed to make money and that is fine. If you are a non-profit organization, you should be focused on providing services at as low a cost as possible, consistent with adequate quality. In the realm of health care, most large hospital systems, which now control the vast majority of all care in most urban areas, are non-profits, but in name only. They behave just like a for-profit entity or worse. They pay their executives truly exorbitant compensation, millions of dollars a year. They accumulate market power and use it to raise prices far above their costs. They waste money on marketing to push their services and build their reputations. And they often don’t do squat for the communities they are supposed to serve, which is reflected again in a report from the Lown Institute. (LI Report) Now that group is a far-left wing think tank whose thoughts are that everything should be free, but their report is correct and points out the ongoing abuse of non-profit status by these large health systems.
The report calculates which systems are providing adequate benefits to the community in the form of charity care and other services. Overall 72% of hospitals aren’t putting back what they should and the largest deficits are in some of the most prestigious systems, like Mass General, NYU, Cleveland Clinic, Vanderbilt and Cedars-Sinai. Minnesota has nothing to be proud of, we don’t have a single hospital in the top 50 for providing community benefit. Our top hospital for community benefit is a small rural one. And that is consistent with the Twin Cities having several non-profit systems with extremely high prices and profits and apparently giving few of those profits back to the community. We have a national and state administration that is regulation happy. If they really want an appropriate target for regulation, it is the profits and compensation practices at these allegedly non-profit health systems.