Nonprofit Hospitals Are Going to Have to Prove They are Not Wolves in Sheep’s Clothing

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medical-bills1-660x330Little Rock     For many top executives and CEO’s it easy to imagine that running a big urban nonprofit hospital has been a sweet gig.  Looking at some of the 990’s that all nonprofits submit to the IRS annually, salaries in the millions are not unusual at some of these big hospitals and many make millions all down the corporate flow chart. They are big whoops in their local communities with thousands of jobs and money to spend and, hey, for all that the regular folks out there know — they’re doing fine, while doing good. Luckily for their patients and the whole community, their world is going to have to change.

Modern Healthcare, the industry’s bellwether magazine, reported recently on the shivers running through many nonprofit hospital CEO’s spines as they absorbed the new world in which the courts and the Federal Trade Commission are no longer willing to take their word for it when they say that mergers and consolidations in their markets will just mean better patient care, when it is clear that they will also create healthcare monopolies able to charge escalating prices on a captive market. A federal appeals court has ordered St. Luke’s Hospital in Bosie, Idaho to unwind their purchase of a major area medical practice, the Nampa, Idaho-based Saltzer Medical Group.  The court essentially said that they could hear St. Luke’s saying it would be better for the community and patient care, but in fact St. Luke’s would have to prove that it wasn’t really much more than an attempt to build a health care monopoly with no price controls.  The FTC had earlier delivered a similar blow to an Ohio hospital, and the head of the FTC has been speaking loudly and clearly in recent months about the agency’s skepticism towards healthcare mergers now.And, then of course you have the fact that nonprofit hospitals are going to have to toe the line because of the new rules from Treasury and the IRS being implemented under the Affordable Care Act. As we assemble our “volunteer army” to look at the 990s for nonprofit hospitals in Texas, Arkansas, and Louisiana, we’re already seeing enough to turn our stomachs.  A billion dollar children’s hospital that claims to spend only $6 million in charity care and some of that is suspect, along with huge fundraising efforts that seem mainly about politics, public relations, and marketing and in fact lose money at year’s end. So-called “community benefit” items included under charity care by other nonprofits that are also in many cases simply marketing efforts dropped into the category.  Many are simply self-serving like one outfit that put the cost of training its doctors as a community benefit under charity care.  I get the feeling when Local 100 finishes pulling all of these pieces together it’s going to make our hair burn and our hearts’ hurt.St. Luke’s in Idaho is a bit far out of our range, but looking at their particular cut on the twisted reality of all of these matters gives me a feeling that they also are going to have many lessons to learn. In their Q&A section they are careful to point out that they are nonprofit and exempted from some taxes, and in their view that requires them to invest in expansion and new services. How about charity? No mention of that. In fact in their self-presentation they have a unique way of describing for their whole hospital system how they see charity. Here’s how they explain their munificence when it comes to handling Medicaid:

The amount of money St. Luke’s receives from Medicaid is an indication that St. Luke’s provides care to a large number of Medicaid patients. In fact, St. Luke’s provides more care to patients covered by Medicaid than any other health care provider in the state.  Medicaid pays hospitals well below the cost of providing care to Medicaid patients.  The costs that count for Medicaid purposes do not include all of the hospitals costs, so the reimbursement is even less on a percentage basis than it would appear.  Because Medicaid pays below cost, a higher volume of Medicaid funding results in lower net revenue for the hospital.  In other words, on balance, St. Luke’s pays to see Medicaid patients because we spend more on the care of the patient than we receive in payment for the care we provide.

What a unique argument!  St. Luke’s “pays” to see the poor, because they believe that Medicaid reimbursement rates are low compared to their view
of their market pricing.

In a similar bit of double-speak, St. Luke’s communicates in totally imperial and oblique terms their collection policy for the poor Idahoan
that cannot pay the sticker price.

If a patient has difficulty paying their medical expenses, St. Luke’s Patient Financial Services works with them to determine what options are available for assistance, including a possible payment plan.  If it is determined that a patient can pay all, or a portion, of their medical bills but chooses not to do so, St. Luke’s refers those accounts to a collection agency to help collect payment from patients. St. Luke’s may charge interest on outstanding accounts depending on the circumstances.

“Chooses” not to do so?”Interesting.  Probably the same way they “choose” to be poor or unemployed or even for that matter, sick and in the hospital in the first place.  It doesn’t take much imagination to believe that St. Luke’s is taking a page out of the now notorious Heartland Hospital’s playbook in St. Joseph, Missouri.We’re doing the work, but we can already tell even as we get started that we are not going to like what we find, but neither are some of these nonprofit hospitals, because change is coming. There are way too many wolves in sheep’s clothing seeing nonprofit status not as a mission but as a tax dodge.
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Please enjoy Modern Times by Dropkick Murphys

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