How Not to Make Money

Leaders of SCL Health will close St. Francis Hospital in Topeka soon but “it’s business-as-usual for the three primary care clinics it still owns in the state”. Sounds great, right?  The clinics serve the poor and people without insurance.  They say that patients pay a flat rate of $15 per visit.  You would think that means they run a very lean organization. The article goes on to say that “their tax filing shows a $59,000 loss in 2015, with about $1.99 million in expenses outstripping $1.93 million in revenues. Most of the revenues come from grants and donations.”  Initially, those kind of numbers struck me weird.  There’s more. “The Caritas Clinics have 21 full-time and eight part-time staff and 240 volunteers. In 2016, they served 1,855 patients.”  What?  Oh….I get it.  These clinics use government math!  Let me explain.  

As a comparison, I serve 600 patients in my Direct Primary Care clinic with 1.5 FTE (full time equivalents or staff). I use a normal capitalistic model.  I only spend what I can afford to spend.  If I spend more then I go bankrupt.  These clinics have figured out a way to MATCH their grants/donations that are coming in.  The more they get the more they spend.  How else would a clinic need 21 full-time and 8 part-time staff for 1855 patients?  You could say, “Doug, these patients are more needy than yours”.  I would need to see proof of that but for argument sake let’s say you are right.  Do they need a 29 staff to my 2.5?  That sounds improbable. The issue is that they can’t show a profit or else lose that free money coming in so they have to spend those funds somehow.  It’s backwards.  Welcome, my friends, to the government model of spending or what I call “how not to make money”.  

Thoughts? 

98910cookie-checkHow Not to Make Money