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Non-profit hospitals

Posted Aug 26 2008 4:17pm

Take a look at your local hospital and you're likely to notice several curious things:



1) It is likely non-profit , meaning it enjoys a non-profit status with the Internal Revenue Service and enjoys the tax benefits of not paying taxes on profits. This provides an advantage to tax-protected hospitals. 70% or more of hospitals in the U.S. are "non-profit."



2) Non-profit or no, many hospitals operate under the guise of a religious affiliation, e.g., St. Mary's Hospital, Trinity Hospital, All Saints', Jewish Hospital, etc.



3) Executives in non-profit hospitals can make capitalistic salaries. One CEO of a Milwaukee hospital took home $3.7 million dollars in salary last year. That's not including the very substantial perks and business interests in the spin-off businesses the hospital owns, including pharmacies, drug and medical device disitributors, even a venture capital division. "Non-profit" does not have to mean that executives within the operation can't benefit handsomely.



That same hospital system spends over $10 million dollars in a year in local marketing for TV ads, print advertising, etc. Ads are slick and professionally produced.



Make no bones about it: These are "non-profit" for tax purposes only . They are for-profit in every other sense of the phrase, including rich rewards for the insiders.



Guess how those fat executive salaries and large marketing budgets are paid for? That's right: the 12-inch incision in your chest; the four stents, defibrillator, and repeated nuclear stress tests; the revolving door of hospitalization after hospitalization that typifies the "heart patient" experience.



See the hospital for what it is: In the 21st century, it is no longer a charitable operation worthy of your volunteer time and donations. It is a business no different than Home Depot, IBM, or--Enron. Yes, they do perform needed services, as well. But the perverse equation that often determines who needs hospitalization and who doesn't, who needs a heart procedure and who doesn't, is not always based on necessity but on financial return. Just ask the CEO.

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