Nonprofit? hospitals redux

So, there's another article on a nonprofit hospital system in today's Boston Globe. This time it's Caritas Christi Health Care, owned and operated by the Catholic Archdiocese of Boston. If this isn't a nonprofit system, what is?

But again, there isn't a single mention of nonprofit status in the entire article. What we read about is that, "By aggressively cutting costs and boosting revenue from medical care, the Boston-based Catholic hospital chain is on track to post operating income of $31.1 million for the fiscal year ending Sept. 30, compared to a $20.4 million loss last year." ... "The chain consolidated operations at its six Eastern Massachusetts hospitals, cut jobs and froze salaries, negotiated higher reimbursement rates from insurers, and recruited more specialists to perform more complex - and profitable - procedures."

Where is the mission? Where is the care for patients? The whole article is about cutting costs and raising revenues. I don't dispute that hospitals need to operate in the black, but there was a time when they were fully understood to be nonprofit organizations, and when they were not in the black donors stepped in to make up the difference. Nonprofit hospitals were founded by like-minded communities - religious, ethnic, neighborhood, etc., to care for their own. Now it seems all they care about is their bottom line and whether they might be a good candidate for acquisition by a bigger organization.

Is there any way to get back to the basics of nonprofit healthcare? I'm afraid that the issue is colored by our difficulty figuring out how to provide basic healthcare to everyone at a reasonable cost (dare I suggest "single payer"). As long as this situation continues, and hospitals keep talking like for-profit companies, it will continue to be very difficult to make the case for support for nonprofit hospitals. If you need help making the case for your nonprofit hospital give me a call.

Nonprofit hospitals - are they?

I just read an article in today's Boston Globe about Partners Healthcare's financial results for the quarter. Apparently Partners is reporting a large deficit for the first nine months of the year, but didn't do as badly in the third quarter as it had in the prior two. If the trend continues, the article says, it will be the first annual loss in the "company's" history.

What's missing from this article? There is not a single mention of the fact that Partners Healthcare is a nonprofit organization, and the parent of two of the best hospitals in the country (along with a number of other smaller units.) How does Partners (and Brigham and Women's Hospital and Massachusetts General Hospital, it's two big members) raise money from the philanthropic community with this kind of news? It's part of the problem that hospitals all over the country have in making the case for philanthropic support: they are treated in the media (and sometimes behave) like for-profit companies, and the general community gets confused.

In the whole current debate about healthcare reform, I have heard only one comment - on the radio the other day - that mentioned that most hospitals in the U.S. are non-profit. And hospitals are mentioned, for the most part, in the same breath as the other "villians" in the healthcare meltdown, big pharma and the insurance companies.

This is a real shame. I have always felt that medical care is a right, and the provision of it is a mission best served by nonprofit hospitals, and that those hospitals deserve the support of the philanthropic community. But how do we best make the case for that support? If you're interested in further thoughts on this issue, e-mail me, and I'll send you a copy of an article I wrote on this subject.

More bad news for non-profit hospitals

So, today there's an article in the New York Times talking about how the American Hospital Association is trying to fight the possibility that the healthcare reform legislation currently working its way through Congress might have in it a requirement that non-profit hospitals provide a certain amount of charity care. I heard about this from a posting from the Association for Healthcare Philanthropy, which is also gearing up its members.

The article quotes a bulletin sent to hospital leaders from AHA that says,“Ask your senators to oppose charity care proposal,” in big bold type.“A formulaic, one-size-fits-all charity care standard will hamstring hospitals’ efforts to respond to the unique needs of their communities,” the bulletin said. “It would penalize children’s, teaching and research hospitals and those in rural areas because they provide community benefit in a variety of forms other than just charity care.”

It worries me that non-profit hospitals are going to be seen as being against charity care. Even though that's not what the bulletin says, my guess is that's how it will be spun. And this is another example in a long history of non-profit hospitals acting like, and especially sounding like, big for-profit companies. It's why this proposed rule has made it in to the legislation in the first place. If the AHA and AHP aren't careful, non-profit hospitals will cease to exist, and that could be a major tragedy. As I've said in an earlier post, I believe that healthcare is a mission, and that mission is best served by non-profit organizations.

Medical Mission

I read an article in the Boston Sunday Globe today that reminded me that the idea of health care being provided by hospitals as a "mission" seems to have been lost. The article talks about the "community benefit" local hospitals provide, and then compares that to the amount of tax savings they realize by being non-profit organizations. It concludes that in general the larger hospitals in Greater Boston save more money by not paying taxes than they provide to the community in benefits. By constantly referring to the hospitals as "companies", and briefly discussing the good being done by one for-profit hospital in Worcester, the article tries to convince us that non-profit hospitals don't deserve their tax exemptions, and that they shouldn't be receiving tax-deductible gifts from donors.

The article describes the calculation of the community benefit and the calculation of the tax savings at some length, admitting that these calculations are complicated, but only in passing does it mention that these calculations may not take into account everything the hospitals do that could provide benefits to the community. Nearly all of the hospitals mentioned are major academic medical centers, which in addition to providing care for all (one of the arguments against them is that almost no one in Massachusetts is uninsured due recent changes in state law), also provide education to a new generation of physicians and on-going research that may lead to cures to some of the diseases being treated. Neither of these activities is "reimbursed" by insurance companies (an unfortunate term hospitals have been using for a number of years.)

One of the problems non-profit hospitals have these days is they have been talking like for-profit businesses for many years. They have also been merging into systems and acquiring medical practices and other ancillary businesses that help make them look too much like for-profit businesses. I would argue, however, that even with all that, non-profit medicine is still crucial to our communities, and that even if Congress manages to pass legislation providing for health insurance for everyone (by no means assured at the moment), non-profit hospitals still have an important mission of education, research, and patient care, and still deserve their tax exempt status. We should all try to remember that non-profit hospitals were created by communities - regional, ethnic, religious, and others - to care for their own because no one else would. They all assumed that good health care was a right that must be provided. As we have changed, and continue to change, the way we pay for our health care, we should keep in mind the history of non-profit health care and its on-going mission. And we should all consider giving to our local hospitals.