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Non-profit Hospitals Generally Screw Patients and Taxpayers. (Updated)

By June 19, 2023June 20th, 2023Commentary

Update–I just ran across another piece of research which is even more damning.  Non-profit hospitals are governed by a board of trustees.  The study finds that if the trustees are compensated for their position, the hospital is likely to provide less charity care.  Can you imagine that, these jackasses are more interested in being sure there is money so they get paid than they are in helping poor people, which is the whole reason their hospital’s are non-profit and tax-exempt.  (HA Study)

Calling a lot of institutions not for profit is a joke.  They often charge a lot for their products or services, pay management excessive compensation and make a lot of money, which goes untaxed due to their non-profit status which generally is associated with being tax-emempt.  That is certainly true of hospitals, which are almost all part of a large non-profit health system.  An article in Health Affairs picks up on this theme, noting that non-profit hospitals are making lots of money while providing at best the same amount of charity or free care.  (HA Article)

The study compared 0ver 2750 hospitals from 2012 to 2019.  Non-profit hospitals actually make more money than for-profit ones and increased their profits and cash reserves faster than for-profits.  Somewhat shockingly, for-profits hospitals appear to use more of their increases in cash reserves for charity care than do non-profits.  86% of non-profits provide less in charity care than the value of their tax-exemption, meaning they are using the savings from not paying taxes to pay management more, or do more advertising–anything but helping poor people.

In my home area of the Twin Cities, this disgrace is fully apparent.  Every hospital that I am aware of is allegedly not-for-profit and several are very large integrated systems.  They make boatloads of money.  They charge exorbitant prices, taking the Twin Cities from one of the lowest cost health care areas to one of the highest.  They pay their heads millions of dollars in compensation and other managers hundreds of thousands.  One, Allina, got caught recently for refusing to treat people who didn’t pay their bills, including pregnant women.  That same system butchers children’s sexual organs so it can make lots of money from those patients’ lifetime of misery.  They waste money relentlessly on advertising.

The not-for-profit and tax exempt status of all these hospitals should be revoked unless and until they lower prices dramatically, stop paying executives more than modest compensation and provide free care for those without health insurance.  That would be consistent with their supposed mission as non-profits

Join the discussion 2 Comments

  • joe Kosanda says:

    Lots of examples of federally tax exempt businesses which are “for Profit” businesses which use the generic term “Non profit” since they qualify as tax exempt under the federal tax code.

    Virtually all the large “non Profits ” are in reality for profit.
    Examples include Girl Scouts, Planned Parenthood, most of the large private colleges, Yale, Harvard, etc.,

    Notable exceptions are often your local charities, local schools, local food banks, local churches, local homeless shelters, located battered womens shelters, etc.

  • Susan Rutten Wasson, M.D. says:

    I would be satisfied if they just charged uninsured people the same amount that MA would pay, instead of “actual charges “ which is easily 3-5X what any third party payor would fork over!

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