Cancerous nonprofits & the monopolization of American health care
“Nonprofit” hospitals turn out to be some of the nation’s most profitable. And that’s just part of the lunacy that increasingly dominates the US health-care system.
Researchers at Johns Hopkins and Washington and Lee Universities report that seven of America’s 10 most profitable hospitals are officially not for profit.
That status entitles them to huge state and federal tax breaks — whose value has doubled in recent years — for “charity care and community benefit.”
Topping the list is the Gundersen Lutheran Medical Center in La Crosse, Wis., which netted $302.5 million profit from patient services alone (not including donations, etc.) in 2013.
A for-profit outlet will pay taxes and returns to investors. Nonprofits wind up paying huge sums to executives — and plowing cash into gaining more market share.
None of the top-profit hospitals is in New York, by the way. That’s because the most profitable facilities generally dominate and even monopolize the market in their area.
And that gives them enormous leverage when setting prices and negotiating reimbursement from private insurers — whose hands are tied because they need those hospitals to be part of their network to attract paying customers.
As Dr. Marty Makary of Johns Hopkins wrote in The Wall Street Journal back in 2014: “When you’re the only game in town, you call the shots.”
And the biggest losers in all this, of course, are John and Jane Q. Public.
It’s a basic economic fact that competition breeds lower prices and greater choices, while monopolies lead to higher prices, less choice and worse service.
But ObamaCare pushes hospital mergers and consolidations, which have been rising at record rates. The law directly bribes doctors and hospitals to form “accountable care organizations,” and it also encourages insurance-company consolidation — which forces hospitals to do the same to preserve negotiating leverage.
We’re certainly not opposed to an honest profit, nor to charities doing good by doing well. But New Yorkers are all too familiar with how nonprofits get abused to serve insiders more than the public.
And the government shouldn’t be forcing mass consolidation in any industry.
These forces are also turning traditional, individual and small-group doctors’ offices into an endangered species.
Bottom line: Local health-care monopolies are the nation’s future, unless Washington changes course — drastically.
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