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Contrary to your comment, yes, they generally are; they're just using Hollywood accounting and referring to their profits as "excess earnings". "A study publis

Contrary to your comment, yes, they generally are; they're just using Hollywood accounting and referring to their profits as "excess earnings". "A study published in the May issue of Health Affairs revealed that in 2013, seven of the top ten most profitable hospitals in the United States were nonprofit hospitals, with each earning over $163 million in profits from patient care." https://www.forbes.com/sites/brucelee/2016/05/08/very-profitable-nonprofit-hospitals-but-where-are-the-profits-going/ https://www.forbes.com/sites/brucelee/2016/05/08/very-profit... (Forbes, yuck, I know. This Washington Post link covers the same story: https://www.washingtonpost.com/news/to-your-health/wp/2016/05/02/these-hospitals-make-the-most-money-off-patients-and-theyre-mostly-nonprofits/ https://www.washingtonpost.com/news/to-your-health/wp/2016/0...) That article links to a CBS "investigation" into the University of Pittsburgh Medical Center, which claims to be a nonprofit but made $948 million from 2011 to 2012, pays its CEO $6 million a year, gets a private chef, chauffeur, and a jet for additional compensation, and has a dozen other administrators each making over a million dollars a year. https://www.youtube.com/watch?v=zikgppxCFnA https://www.youtube.com/watch?v=zikgppxCFnA Claiming themselves to be a nonprofit saves them about $200 million in state and federal taxes. So, they're just an "accidentally profitable" nonprofit. But yeah, sure, let's just keep taking the health care industry at its word when it says it's not profitable. edit: more, because why use a scalpel when a hammer will work just as well? "Many nonprofit hospitals calculate their charitable care by using something known as “charge master” pricing; exorbitant, non-negotiated prices which are inflated many times higher than what private insurance or Medicare would pay. This allows facilities to overstate their provision of “charity care,” calculated as revenue loss by the hospital in exchange for their lucrative tax exemptions. In a patient evaluated with chest pain, the allowable for Medicare is $3600; however, in an uninsured patient, the hospital may “write-off” an inflated $25,600 in uncompensated costs, which is 8 times higher than actual cost of care provided." http://thehealthcareblog.com/blog/2017/04/25/the-fairy-tale-of-a-non-profit-hospital/ http://thehealthcareblog.com/blog/2017/04/25/the-fairy-tale-... "But even many hospitals that showed losses on patient care had positive margins overall. The study found that median net income per adjusted discharge from all activities—including investments, charitable contributions and space rental—was $353 for all hospitals and $178 for hospitals with 50 or fewer beds." http://www.modernhealthcare.com/article/20160502/NEWS/160509991 http://www.modernhealthcare.com/article/20160502/NEWS/160509... "Non-profit is instead simply a tax status, and specifically, it exempts hospitals from paying real estate and other taxes in exchange for contributing a fixed portion of their revenues to ‘community benefit’ rather than paying dividends to shareholders. ... Cleveland Clinic, one of the largest health systems in the country, was held up as an example of a wildly profitable non-profit in a recent article in Politico." https://www.acsh.org/news/2017/07/19/non-profit-hospitals-can-be-extremely-profitable-11572 https://www.acsh.org/news/2017/07/19/non-profit-hospitals-ca... (read that one, it's a good breakdown of the accounting that hospitals use to maintain their nonprofit status while behaving in every other way like any other for-profit business.)

otempomores 9y ago
When in the wulf pit the worst one is the one on my side of the group
dragonwriter 9y ago
> Contrary to your comment, yes, they generally are; No, they're not. > they're just using Hollywood accounting and referring to their profits as "excess earnings". No, they aren't. Excess earnings are the correct technical term. Non-profit status, even in theory, has nothing to do with whether you earn more in revenue than you expend in costs, it has to do with whether there are stockholders or others who have a claim on accumulated returns. More specifically, charitable nonprofits (which non-profit hospitals are) have a wide variety of additional requirements and restrictions (both in general, and specific additional requirements for hospitals, including several added by the ACA.) > read that one, it's a good breakdown of the accounting that hospitals use to maintain their nonprofit status while behaving in every other way like any other for-profit business. No, it's just a bunch of dishonest, or perhaps merely clueless, mischaracterizing; the most obvious example being considering money expended in providing Medicaid services but not covered by Medicaid reimbursement as money the hospital “paid to itself” rather than an external benefit. This isn't money the hospital paid to itself, it's money the hospital paid out to provide services under a public program providing healthcare to the medically indigent but which was not reimbursed by that public program (in general, Medicaid is a money-losing program for providers, as—while there are some exceptions—reimbursement is generally at the lowest of three things: a state set rate, the actual cost of providong the service, or the provider's usual and customary charge for the same or substantially similar service. This is at best break even, but over all, across all providers, it's always going to be, in practice, below actual cost.
- pas 9y ago
  So why aren't for profits the most profitable then? And the simple fact that a non profit can spend 6M USD on compensation to its CEO loudly advertises the healthcare provider market inefficiency.
  - maxerickson 9y ago

otempomores 9y ago

When in the wulf pit the worst one is the one on my side of the group

dragonwriter 9y ago

> Contrary to your comment, yes, they generally are; No, they're not. > they're just using Hollywood accounting and referring to their profits as "excess earnings". No, they aren't. Excess earnings are the correct technical term. Non-profit status, even in theory, has nothing to do with whether you earn more in revenue than you expend in costs, it has to do with whether there are stockholders or others who have a claim on accumulated returns. More specifically, charitable nonprofits (which non-profit hospitals are) have a wide variety of additional requirements and restrictions (both in general, and specific additional requirements for hospitals, including several added by the ACA.) > read that one, it's a good breakdown of the accounting that hospitals use to maintain their nonprofit status while behaving in every other way like any other for-profit business. No, it's just a bunch of dishonest, or perhaps merely clueless, mischaracterizing; the most obvious example being considering money expended in providing Medicaid services but not covered by Medicaid reimbursement as money the hospital “paid to itself” rather than an external benefit. This isn't money the hospital paid to itself, it's money the hospital paid out to provide services under a public program providing healthcare to the medically indigent but which was not reimbursed by that public program (in general, Medicaid is a money-losing program for providers, as—while there are some exceptions—reimbursement is generally at the lowest of three things: a state set rate, the actual cost of providong the service, or the provider's usual and customary charge for the same or substantially similar service. This is at best break even, but over all, across all providers, it's always going to be, in practice, below actual cost.

pas 9y ago
So why aren't for profits the most profitable then? And the simple fact that a non profit can spend 6M USD on compensation to its CEO loudly advertises the healthcare provider market inefficiency.
- maxerickson 9y ago