The Nonprofit Hospital

Check this NPR hit piece on nonprofit hospitals. Ouch.  It seems that even though they get extreme tax breaks to deal with lower income patients many of these hospitals want more. Now they are garnishing some of these patients’ wages.

Let me come at this from many angles.

  • First of all, the whole “nonprofit” designation has always been suspect to me.  The NFL has been nonprofit for years (though that may finally change).  They rake in billions.
  • Second of all, nonprofit literally means not showing a profit. Well, you can hide that profit in massive expansions.  Why does it seem that every hospital in the country is always building something?  Think about it.  You always hear about new plans or see the cranes with more construction going on. Or, better yet, why do these CEOs of these hospitals make tons of money?  Well, it is a great way to hide your profits.
  • Lastly, to be contrarian, my guess is that the hospital may be sick of patients who don’t even attempt to pay. We all know frequent flyers who could give a damn about their bill.  Is that fair?  Probably not.  If you go after their wages will they keep coming?  Probably not.  There is your answer.

Am I wrong on this?  Tell me your thoughts.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected]

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3 Responses

  1. Seneca says:

    Non-profit hospitals also are quite good at playing the charity game which, in most communities is almost a zero sum game; that is, there is a finite amount of money that the community will give to charities on the whole. If a person or business gives to the hospital, that is money not going to some other charity. My local hospital attempts to hit me up for thousands of dollars. They are quite unhappy when I tell them I have an idea that will net them at least $1M if not more: Make a 10 to 25% pay cut across all levels of administration who make over $250K. They have quit asking.

  2. Pat says:

    EMTALA should be repealed. All Medicare and Medicaid treating physicians should receive ironclad sovereign immunity (since both are gov’t patient populations), as should any non-pay i.e. charity care. This would allow hospitals to turn away BS non-emergent cases without threat of lawsuit, and malpractice insurance premiums reductions, savings to be passed on to customers.

  3. T.Elliott says:

    In a very generic explanation, “nonprofit” means that the organization does not pay shareholders. The revenue generated goes back into the organization.
    The myth about nonprofits is that they shouldn’t seek to generate revenue. When In fact, they always (and should) seek to generate revenue. Some seek it for fiscal sustainability, others seek it for growth, and others seek it to build up a fiscal safety net should financial hard times ever greet them.

    So the motivation of the executive team is rarely about just meeting budget. It’s still a business.

    Does this excuse them for being aggressive with persons that cannot afford their healthcare? No.

    However, it means they should work with those individuals who are having trouble paying. In addition, they should recognize that the likelihood of a person showing up to the hospital saying, “Today I want to go into life crushing debt.” is 0.00%

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