5 ms·

The article is a bit misleading in that it uses revenue. Typical margins in a health-system is slim. 3-6%. So, actual 1-2% charity care of revenue is quite sign

The article is a bit misleading in that it uses revenue. Typical margins in a health-system is slim. 3-6%. So, actual 1-2% charity care of revenue is quite significant. The thesis is correct that a health-system CEO shouldn’t make $17m/yr. It’s a non-profit largely funded by tax payers and maintains its market share by government regulations. Just the charity care component is a bit misleading.

s1artibartfast 3y ago
>It’s a non-profit largely funded by tax payers. Is it actually government funded, or does it sell services which the government pays for? I dont know if it is Baader–Meinhof phenomenon, but it seems like I increasingly see funded used to describe revenue for services rendered. It seems like a bit of a bait and switch, because the word funded often carries come connotation of ownership, obligation, or charity.
- felipemnoa 3y ago
  >>Is it actually government funded, Maybe indirectly. As a charity they get lots of benefits that allows them to save money.
  - s1artibartfast 3y ago
    Not taxing money =/= giving money. Some of the impacts are identical, but they have other fundamental differences. I pay less than 100% tax, but I wouldn't say that the government is funding my lifestyle
- prasadjoglekar 3y ago
  Both. The govt gives them a break on taxes. They also pay the hospital thru Medicare and Medicaid.
  - LordDragonfang 3y ago
    I'm not sure the latter holds. That's like saying grocery stores are "government funded" because they take food stamps - or for that matter, that private retirement homes are "government funded" because the retirees get their income from Social Security. And for that matter, the former definitely doesn't hold, because nearly every entity gets some tax break. Every homeowner is "government funded".
  - s1artibartfast 3y ago
    I wouldn't call either of those funding in the sense I described.
  - lozenge 3y ago
    Isn't the Medicare payment less than the hospital gets giving the same treatment to somebody with private health insurance?
harimau777 3y ago
Disclaimer at the start: I'm asking this because I want to understand more about the situation that you are presenting, not as an indirect way to "um actually" you. How would margins be defining in this case? When I hear that the margins at gas at a gas station are x%, I understand that they are basically talking about how much I pay per gallon minus how much the gas station paid per gallon. However, it feels like defining margins in a health system would be much more complex. Is it just lookin at the raw materials (e.g. how much do medications, bandages, and scalpels cost the hospital)? Depreciation on expensive equipment like MRIs? Does pay factor in and if so is it just the salaries of people who actually do the work like managers, nurses, and doctors or also the compensation for people like CEOs?
- deleted 3y ago
  [deleted]
- jonathan-adly 3y ago
  Here are 2 relevant scenarios. A homeless alcoholic withdraws and gets seizures, spending a week in the ICU. He is not on Medicaid, but qualifies. After paying for all his care and applying for Medicaid on his behalf. The hospital might get 50 cents back for every dollar they spent. (They spent on doctors; nurses, medications; EMR bill, case management, etc.). This guy will essentially come back 5-6 times per year. With negative margins every time because that’s how Medicaid is designed. 2nd scenario is a 70 year old with a knee replacement surgery and great insurance Medicare + supplemental. He spend a day and half in the hospital and the money that his insurance paid, would be ~130-150% cost of care. Average everything out; and you end up with 3-6% margins. Obviously, salaries are big part of the cost. So, perhaps the margins will be better if the CEO is paid less. But, overall its a low-margin business because the biggest payers are Medicaid and Medicare and they more or less pay whatever they want via legislative means.
  - bumby 3y ago
    Are you saying medicare/medicaide are net-negative? Is so, what prevents hospitals from refusing to accept them? I suspect they don't because it's not financially solvent to do so, given the number of patients who use those services. That on it's face seems to bring into question the claim that they are net-negative (whether that's due to legislation or other means).

s1artibartfast 3y ago

>It’s a non-profit largely funded by tax payers. Is it actually government funded, or does it sell services which the government pays for? I dont know if it is Baader–Meinhof phenomenon, but it seems like I increasingly see funded used to describe revenue for services rendered. It seems like a bit of a bait and switch, because the word funded often carries come connotation of ownership, obligation, or charity.

felipemnoa 3y ago
>>Is it actually government funded, Maybe indirectly. As a charity they get lots of benefits that allows them to save money.
- s1artibartfast 3y ago
  Not taxing money =/= giving money. Some of the impacts are identical, but they have other fundamental differences. I pay less than 100% tax, but I wouldn't say that the government is funding my lifestyle
prasadjoglekar 3y ago
Both. The govt gives them a break on taxes. They also pay the hospital thru Medicare and Medicaid.
- LordDragonfang 3y ago
  I'm not sure the latter holds. That's like saying grocery stores are "government funded" because they take food stamps - or for that matter, that private retirement homes are "government funded" because the retirees get their income from Social Security. And for that matter, the former definitely doesn't hold, because nearly every entity gets some tax break. Every homeowner is "government funded".
- s1artibartfast 3y ago
  I wouldn't call either of those funding in the sense I described.
- lozenge 3y ago
  Isn't the Medicare payment less than the hospital gets giving the same treatment to somebody with private health insurance?

harimau777 3y ago

Disclaimer at the start: I'm asking this because I want to understand more about the situation that you are presenting, not as an indirect way to "um actually" you. How would margins be defining in this case? When I hear that the margins at gas at a gas station are x%, I understand that they are basically talking about how much I pay per gallon minus how much the gas station paid per gallon. However, it feels like defining margins in a health system would be much more complex. Is it just lookin at the raw materials (e.g. how much do medications, bandages, and scalpels cost the hospital)? Depreciation on expensive equipment like MRIs? Does pay factor in and if so is it just the salaries of people who actually do the work like managers, nurses, and doctors or also the compensation for people like CEOs?

deleted 3y ago
[deleted]
jonathan-adly 3y ago
Here are 2 relevant scenarios. A homeless alcoholic withdraws and gets seizures, spending a week in the ICU. He is not on Medicaid, but qualifies. After paying for all his care and applying for Medicaid on his behalf. The hospital might get 50 cents back for every dollar they spent. (They spent on doctors; nurses, medications; EMR bill, case management, etc.). This guy will essentially come back 5-6 times per year. With negative margins every time because that’s how Medicaid is designed. 2nd scenario is a 70 year old with a knee replacement surgery and great insurance Medicare + supplemental. He spend a day and half in the hospital and the money that his insurance paid, would be ~130-150% cost of care. Average everything out; and you end up with 3-6% margins. Obviously, salaries are big part of the cost. So, perhaps the margins will be better if the CEO is paid less. But, overall its a low-margin business because the biggest payers are Medicaid and Medicare and they more or less pay whatever they want via legislative means.
- bumby 3y ago
  Are you saying medicare/medicaide are net-negative? Is so, what prevents hospitals from refusing to accept them? I suspect they don't because it's not financially solvent to do so, given the number of patients who use those services. That on it's face seems to bring into question the claim that they are net-negative (whether that's due to legislation or other means).