Which is worse: being openly all about the money and bragging about it or pretending to be above such things while raking in the tall dollars anyway? Open greed or greed with dignified poise? The rude millions or the graceful aristocratic fortune? The answer, dear readers, lies with the uniquely American institution of obscenely profitable “nonprofit” hospitals.
If Wall Street gambles the world economy with taxpayer backing, nonprofit hospitals receive billions of federal, state, and local tax breaks in order to provide charity care that they simply do not provide. Examples abound:
- Methodist Hospital – The most prestigious hospital in Texas was sued by Jim Mattox, the populist state attorney general, for spending peanuts on indigent care (1% of gross revenues, 6.8% of net revenues) in the 1980s. The numbers? $5 billion in revenue over four years, $250 million in profits, $330 million in cash, and yet only $17 million in indigent care. They must have spent their property tax break on hotels, hunting lodges, real estate, valets, and restaurants .
- M.D. Anderson – Flip-flopping between first and second place for the best cancer center in the world, the M.D. Anderson Cancer Clinic is actually part of the University of Texas, a public university system. Recently testifying before Congress was a woman from Lake Jackson who was told turn over $60,000 to be admitted to the hospital after she gave them a check for $45,000 for her lab tests. And she had insurance. As the Senate Finance chairman in Austin remarked, “M.D. Anderson is public institution that doesn’t seem to see public patients.” M.D. Anderson responded that you can’t “compare” M.D. Anderson to local Texas public hospitals in terms of their indigent load. They are after all, only the second richest cancer charity in America the president muttered. Perhaps they should be compared to these out of state gems.
- Northwestern – Northwestern built a new campus with marble lobbies for, you know, one billion dollars. One thing they forgot to pay for was indigent care which was only $20.8 million in 2006 (compared to the CEO’s salary of $16.8 million and an annual tax break of $37.5 million). Maybe the Scrooges should dig a bit deeper into their portfolio of $1.82 billion, enough to run for an entire year without a penny of revenue.
- University of Chicago – An “elite” institution (i.e. we treat rich people and research their diseases) in the poor African-American South Side of Chicago made the papers for its ER’s callous disregard of a child whose lip was bitten off by a dog because he only had Medicaid. The American College of Emergency Physicians rebuked the institution for its systematic non-treatment of the uninsured and called for a congressional investigation. An even dirtier secret is that the Urban Health Initiative to keep people out of the ER was cooked up by Michelle Obama and marketed by David Axelrod, Barack Obama’s chief strategist in their days back in Chicago. The numbers? $1 billion in revenue, $38 million in tax breaks, and yet only $8.7 million of charity care. Northwestern (11,000 charity outpatients and 1,000 charity inpatients) looks like the Gates Foundation compared to the University of Chicago (63 charity outpatients, 312 inpatients).
- Pittsburgh – Nonprofit institutions, including the very profitable University of Pittsburgh Medical Center, cannibalize the tax base of the city by buying up profitable businesses and restaurants that are then exempt from local taxes. The city still has to fund fire, police, electrical, and sewer services which raises taxes for everyone else (who then move outside the city limits becauses taxes are too high). Of course, the hospital CEO makes $2.4 million while a struggling city dies a little bit more.
With stats like these, is it any wonder that 77% of nonprofit hospitals are profitable while only 61% of for-profit hospitals make money? Perhaps it is best to leave the last word from the bastards themselves:
Methodist Hospital of Houston disputes the charges made by the Texas Attorney General, Jim Mattox. “We are a nonprofit hospital, but not a charity hospital,” said Larry L. Mathis, the hospital’s president. “We do not set out specifically to extend our services to the poor. We were founded 71 years ago as a teaching and research center, and we believe those activities are charitable because they benefit everyone.”
- Wall Street Journal – “Senators Consider Curtailing Hospitals’ Tax Breaks“