New Orleans With each news story reaffirming earlier regional reports by ACORN, Local 100 United Labor Unions, and Labor Neighbor, I don’t know how to get around the conclusion that many tax-exempt, supposedly nonprofit hospitals are a sham, little more than wolves in sheep’s clothing, and no better than the low bar set by for profit institutions. The latest report by The Wall Street Journal not only paints a picture of their deep-pocketed financial scams, but also the complicity of the federal government and its loosey-goosey Covid relief standards.
Here’s the deal. The federal government’s Covid relief package, initiated under the Trump administration, involving the transfer of tens of billions to hospitals was based on a formula that calculated aid to total revenue of a hospital, and not the need of a hospital or the volume of their Covid cases. Undoubtedly, this was a crisis time decision prioritizing speed in dealing with the pandemic trumping any other considerations. Nonetheless if anyone wants to believe that it was not also the result of intense and well-funded lobbying by the big hospitals and their control of the American Hospital Association, then, as the old saying goes, I have a bridge in Brooklyn I’d like to sell you. The Biden administration was responsible for only allocating about 10% of this money, but by that time the cows were out of the barn.
What it meant for the hospitals that were on the long or short end of this deal was the difference between making bank and losing your shirt.
Overall, 1,257 hospitals that got federal pandemic aid were profitable when they got the funding, according to the Journal’s analysis of financial-disclosure reports. These hospitals, which got a total of $16.7 billion in aid, reported $53.6 billion in profits from patient care, not including the aid, for the years during the pandemic that they have documented in filings with the government. For 783 hospitals, $10 billion in aid helped swing their losses to profits. But 1,644 hospitals, which received $35 billion in federal pandemic aid, reported a loss of $129.1 billion during the period, not counting the added funds.
Some of the big boys, including nonprofits, moved the aid into investment portfolios almost as soon as they received it, while others laid off nurses and other staff, because parts of their facilities were now off limits for many forms of elective surgery.
What seems the most pernicious to me is the way that this kind of program incentivized hospital price inflation, less politely know as price-gouging. The divergent tale of two nonprofit, tax-exempt hospitals, Arnot Health in New York State and UCHealth’s hospitals in Colorado, based on pricing is clear from the article:
“There is no question that price drives revenue,” which put low-price hospitals at a disadvantage for relief funds tied to revenue, said Sherry Glied, an economist and dean at New York University’s Robert F. Wagner Graduate School of Public Service. The authors of a study published in the Journal of the American Medical Association in August 2020 also said higher hospital prices contributed to greater revenues. Arnot Ogden prices are relatively low; it prices many common services for private insurers at 1.2 times what is paid by Medicare, a widely used benchmark, the Journal’s analysis of Turquoise data found. For comparison, hospital prices for private insurers are an average of about 2.2 times what Medicare pays, the Congressional Budget Office said in January. To treat complex patients with heart failure, Arnot Ogden at most charges about $23,190, about twice Medicare’s $10,865 payment for the area. UCHealth, a nonprofit system that owns 12 hospitals in Colorado, prices common services three times what Medicare pays. UCHealth’s Poudre Valley Hospital in Fort Collins, Colo., charges as much as $34,047 for the heart failure treatment, or 3½ times what Medicare pays in that area, the Journal’s analysis of Turquoise data found. The system’s Medical Center of the Rockies in Loveland charges a top price for complex heart failure care of $34,630, close to four times the Medicare rates in its region. The two hospitals had some of the nation’s largest relief payouts, while their communities had among the lowest Covid death rates nationwide.
I’m sorry this is just so wrong on so many measures, not just the question of Covid relief. As profoundly it reveals part of the reason our healthcare costs are so wildly out of whack compared to other developed countries and our own GDP, and of course the cruel irony of profit maximization by nonprofit, tax-exempt facilities supposedly designed to serve the poor, not just their own bottom line.