Interesting points especially the last sentence.
Jo Ann
From: John Troidl
Maggie,
Thank you for your note (as well as those of others).... I could not agree more!
Three additional comments......
1. Long ago and very early in my career, I had a brief conversation but informative conversation with the head of the Federation of American Hospitals. He said, and I quote, "We prefer to be called tax paying hospitals, rather than for profit hospitals". There is a (good) point there.
2. Dignity made over $850,000,000 profit, ooops, "excess revenue over expense" last year. They do a lot of good things. And they MAKE A LOT OF MONEY!
3. I took an econ class in business school called "Resource allocation in the non-profit sector" that included a good look at the hospital industry. After a while it started to look like the for profits and the non profits behaved remarkably similarly. (for example: BOTH respond to investors because BOTH sell the financial instrument called "Bond").
This discussion has been good to flesh out this issue.... and now, from a public health perspective, let's do all that we can do to KEEP PEOPLE OUT OF HOSPITALS.... ALL OF THEM! (except when they really, really need it).
Cheers,
John
On Wed, Jan 14, 2015 at 10:19 AM, Maggie Huff-Rousselle <mhuffrousselle@gmail.com> wrote:
There is nothing to guarantee that the term ?non-profit? means anything more than that the designated institution does not have to pay taxes on profits. If the organization is growing, it has to make profits in order to cover cashflow needs. Non-profits can be less efficient and have lower quality than profit-making organizations. Those are the things we should be paying attention to: quality and efficiency (cost efficiency would incorporate executive pay).
Maggie
Maggie Huff-Rousselle
On Jan 13, 2015, at 9:47 PM, Tammy Pilisuk <bello6bello@hotmail.com> wrote:
I think it's a good point that if nonprofit hospitals really want to differentiate themselves that they need to do more than soul-searching, but some concrete tough-love advocacy. It's no wonder the general public is outraged when the Kaiser top exec earns a multi million dollar salary and we hear many non-profit hospital payment collection policies are similar to private hospitals. Let them (or the body politic) set a standard that makes it clear what the difference is. To me, it's not always so clear.
Turning them all into for-profit would be the wrong direction. But giving them more of a charter to serve (and exec salary caps) would could help.
Tammy
_____
Date: Tue, 13 Jan 2015 11:01:55 -0700
From: pat@pvhealthsolutions.com
To: equalhealthnetwork@lists.mayfirst.org
Subject: Re: [EQUAL Health] From Martha Livingston re: a California Healthline article.
Jo, you bring up a very good point as non-profit hospitals have been under fire for several years resulting in a whole group of rules and regulations at the Federal level that includes community assessments every three years that are required by the IRS of all agencies. I?m not sure this is a bad activity for hospitals to understand their community but it has not been well linked with the ACA though some communities are attempting to do this. Also, a new rule just this week was announced regarding how non-profits bill patients for their hospital bill. (link to article below) From the article I did not see that for-profits had to follow the same rule. This doesn?t seem adequate in addressing the issue when some hospitals are left off and can continue to bill full charges versus discounted rates as negotiated with health plans. I am all in favor for fixing our broken health care system and by no means do I support some of the actions hospitals
What about the big ?non-profits? who behave like corporations (i.e. Kaiser) and do not perform enough public interest work to really justify their status. I recall a famous pamphlet issues in the 1970?s (I think Ellen S was a co author if I recall correctly) called ?The Profit in Nonprofit Health care ? or some such. I think defending the ?nonprofit? sector uniformly is a bad idea. Same issues in higher education. (Harvard anyone?)
Joe Berry
------------------------------------------
Please use <joeberry@igc.org>
or go further back to articles published by PNHP founders in Socialist Review back when the Clinton Plan was being debated in 92 or so.
Joe
------------------------------------------
Please use <joeberry@igc.org>
There is evidence that for-profit hospitals behave differently (less efficient, lower quality, less accessible) than not-for-profit. One example of the literature on the topic is attached.
Robert Chernomas
Professor of Economics
University of Manitoba
Robert.Chernomas@umanitoba.ca
Hopefully, the point of these exchanges is that the profit versus non-profit status (as being the determinant of behavior/performance) is simplistic and often misleading. The variables at play are more complex, and non-profits can be inefficient and provide poor quality.
Maggie
Maggie Huff-Rousselle
mhuffrousselle@gmail.com
The health economist Robert Evans has provided an analysis of why for-profit hospitals are more costly/less efficient and of lower quality than not for-profit. Inevitably in a country so heavily influenced by the Medical-Industrial-Complex bad practice will tend to drive out good practice even in structurally superior organizations, just less so.
Robert Robert.Chernomas@umanitoba.ca
Hi Robert
While I certainly don?t mean to suggest that the non-profit versus profit status never has an impact, the article you sent is a brief summary that uses that topic as a wedge but does nothing substantial to explain differences. let alone analyze them. It is a nice opinion piece, written for a Canadian audience, NOT for people who are not working within the fractured and complex payment/reimbursement system in the US. Few readers in Canada ? and it would seem the author ? understand the US payment/reimbursement system and the complications and wastage it creates. He writes of a ?mixed delivery? system, which many Canadians fear, where more affluent segments of the population can opt for a private sector that may allow shorter waiting times and other possible advantages. Such a private sector would also allow providers to opt into private payment or (in the examples he mentions) supplement the regular provincial payment system with additional charges. Canadians use various terms to describe what he calls a ?mixed? system, but a major underlying issue that he identified (but does not identify as central) is the duality of payment and funding ? which is just what most of the people on this group have been discussing for years ? the fragmented complex payment/reimbursement system is a major source of wastage, inefficiency and poor performance in the US system. In Canada, both financing and payment are largely controlled by the federal and provincial governments; this steam lines the system. It even reduces the need for regulation. Hospital costs are largely controlled through budgets. Physicians, who are generally private practitioners, are fee-for-service, with the fees set by a single payment agreement.
Most of the article has nothing to do with explaining differences between profit versus non-profit. It is about citizens and providers opting out of the national/provincial systems, and concerns about what will happen if that trend ? which has begun in some provinces ? continues to grow. One could argue that the major source of identity for Canadians is not being American, and we always fear becoming like the US. Sometimes we are described as cheddar cheese: no one?s favorite cheese, but no one dislikes it. We?ve also been described as unarmed Americans with health insurance. It is not just the widespread coverage of insurance that makes the difference, although that avoids catastrophic care financial ruin for individuals and families, it?s the way the system is financed (where the money comes from and who controls it) and the way it is paid out. The is arguably THE difference between the US and Canada, not the profit versus non-profit status of facilities.
Of course, the Canadian system has its weaknesses, but the way the system is financed is the distinguishing characteristic that makes it much better performing than the US.
Maggie
Maggie Huff-Rousselle
The technology, the bureaucracy and the profiteering system are smothering
the good docs.
Jeoff Gordon
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Date: Sat, Jan 17, 2015 at 7:21 AM
Subject: Goodbye to a trusted doctor, hello to the healthcare wilderness
To: Dad <paradocs21@gmail.com>
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Hi Maggie,
You are quite right that article does not explain why for-profits (FP) are structurally different than not for-profits (NFP)-I just sent it to point to the evidence in support of the idea. The US system is uniquely inefficient and unfair-I was just trying to point out that FP sector has its own special character.There are a number of articles that contrast FP with NFP inside the US that provide details as to why they differ with respect to efficiency and quality. Bob Evans in his old textbook "Strained Mercy" (among other sources) provides a theoretical framework as to why when their are stockholders involved health organizations behave differently. In our book "To Live and Die in America: Class, Power, Health and Health Care" we try to summarize both the theoretical and empirical literature on this topic for the US as well as the history of health care reform. A Canadian style single-payer system is what they need but can't get because those who profit from it have the power to determine the structure of the system.
Robert
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12:17 PM (20 hours ago)
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The whole status of not for profit hospitals in today's health system is a basic farce. There is no doubt that a for profit chain can gain huge tax advantages by having a couple of nonprofits in their system and dumping a lot of (?trumped up) expenses on them. Even the status of ordinary "not for profit" hospitals is weird. See an excellent recent study by San Francisco's Greenlining Institute: "Community Benefit and Missed Opportunities." (You can google this.)
The feds finally worked out a reporting form where these hospitals have to report their "charitable activities and contributions." I doubt that many of them even come close to giving benefits to the community which even approximate how much they save in taxes. This is especially perverse because I bet they calculate their charitable contributions with their chargemaster prices which Brill so brilliantly trashes. It is even worse and more appalling in California where State regulation (which the Greenlining Institute is working to eliminate and the hospital lobby has ardently supported) allows hospitals to count as charitable something called "Medicare underpayments" !!!
On Fri, Jan 16, 2015 at 2:53 PM, Gail Gordon <ggordon@njcu.edu> wrote:
Hi all,
I have been looking at the acquisition of non-profit hospitals by for-profit chains. It is picking up steam in NJ. Perhaps you can help me with one thing that I came across. Prime Healthcare (based in CA) GAVE two of its hospitals to its foundation, turning them into non-profits. I can't seem to figure out why they would do this. Obviously they think it is in their interests to do so. They praise themselves for this action. I'm thinking that perhaps they can get a huge write-off doing this plus the taxes they will save as non-profits. Help anyone?
Gail
Gail Gordon, DrPH
Professor and Graduate Coordinator
New Jersey City University
2039 Kennedy Blvd.
Jersey City , NJ 07305
201-200-3431
