Do Non-Profit Hospitals REALLY Control Costs?

Non-profit hospitals have appeared to be socially conscious, humanitarian institutions for a long time. I say, “have appeared to be” because that is the image they have sought to project. However, many (not necessarily all) of these non-profit medical facilities have a dark side.

According to an article in Becker’s Hospital Review (July 23, 2013), there are 5,724 hospitals in the United States (information obtained from the American Hospital Association). Of those hospitals, 2,903 are non-profit hospitals, and 1,025 are for-profit.

Some Basic Facts

U.S. News and World Report states, in a May 2016 article, that researchers from the John Hopkins Bloomberg School of Public Health as well as Washington and Lee Universities conducted an analysis of data from 3,000 hospitals, 59 percent of which were non-profit, 25 percent for profit, and 16 percent public.

Disturbing Conclusions

The study was published in the journal Health Affairs, and the U.S. News article referred to those published statistics that out of 10 of the most profitable hospitals in the country, seven of them were non-profit with the most “profitable” hospital being non-profit Gundersen Lutheran Medical Center with an annual¬† “profit” of $302 million. The U.S. News article quoted a lead researcher who drew the conclusion that the most profitable hospitals in the country established monopolies in their communities that gave them the power to¬† mark up the prices they charge private insurers. ALERT: Driver of high health care costs!

Remember that non-profit hospitals pay no property or income taxes, and the monopolies they grab hold of can drive independent physicians out of business, or at least put a huge damper on their local business. This is not necessarily because the independent physicians have higher prices. In fact those physicians may actually have better pricing, but the hospitals’ relationship with insurers may prevent those insurers from doing business with other providers that are, in fact, less expensive … and for one reason – they are competition to the non-profit hospitals.

Think About It

I feel such arrangements are a rip-off to taxpayers because they are then paying more than their fair share of taxes to have their health care dollars bilked from them by entities that pay no taxes.

There are a lot of facets to this situation, and I don’t want to overwhelm you, my readers, with information overload. I don’t want anybody’s head exploding! Instead, I plan to write a series of posts about the way that many non-profit hospital systems drive up the cost of health care while actually making profits that they supposedly sink into the community, but not without the cost of harming the local residents’ choices in physicians and facilities.

This is a complex, but harmful situation, and I want to make sure this is fully understood with the hope that I can inspire some political activism (peaceful only) to encourage my readers to contact their elected representatives on the local, state and federal levels, asking them to take a fresh look at the implications of how these hospital power centers harm citizens in this country.

If you want to make sure you don’t miss a post, please sign up for an email subscription (on the upper right hand of this post) so that you can get the whole picture of what we need to do to provide truly affordable health care in the U.S.

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14 thoughts on “Do Non-Profit Hospitals REALLY Control Costs?”

  1. Thank you, I have several posts after that one. I usually post at least twice a week, except last week was only once because I was involved with other things.

  2. Hi! It looks like your name is Ethan. I am going to assume you are referring to the article on whether non-profit hospitals really control costs. At this time, I do not have an RSS feed going. I may in the future, but this blog is fairly new. However, you can subscribe to my email list (the form is located to the top right of my posts). If you sign up, I can notify you whenever I have a new post. Additionally, I plan to be writing a special report about health care costs soon that I will send to my subscribers. Thank you for your kind words. – Cathy

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    1. Thank you for your kind words. I encourage you to subscribe to my email newsletter, which I will be starting up again very soon, after a hiatus because I have been re-designing my blog. You can find the subscription form on the sidebar to the left of my posts.

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