MauryTHINKS

One begins to wonder how many competitive advantages non-profit hospitals need after reading of State Sen. Bill Ketron’s sponsoring a bill that allows them to formulate strategic plans and marketing strategies in secret non-public sessions.

The proposed bill has passed the house and is now scheduled for a vote in the Senate.

Ketron says the bill is needed to “level the playing field.”

This is an interesting spin of facts because according to the American hospital directory, an information service company that compiles data on all hospitals, 77 percent of “non-profit hospitals” in the United States are profitable, compared to 61 percent of “for-profit hospitals.”

According to federal data, 60 percent of the nation’s 3,400 hospitals are 501(c)3 non-profit, 23 percent are for-profit hospitals and 17 percent are run by counties, state or federal government and account for 31 percent of total U.S. health care costs. Those costs are projected to increase to 39 percent by 2017.

A 2006 Congressional budget report said non-profit hospitals receive an estimated $12.6 billion in annual tax exemptions on top of the $32 billion in federal, state and local subsidies they receive each year.

In return, the non-profit is supposed to provide a “community benefit,” a loosely defined IRS requirement that’s intended to provide a charitable return back to the community. Originally, non-profit hospitals were champions of the poor and indigent health care. More & more non-profit hospitals have become institutions of and for the wealthy and the privileged hospital executives and doctors who operate them. Non-profit hospitals have no share holders to pay dividends to. Much of the profits they earn from their operations or financial investments are channeled back into the operations and reward executives and doctors with larger pay packages and fees for services. Non-profit hospital revenues are being maximized through taxpayer funded Medicare reimbursement processes, hiking prices on procedures and services to several times their real costs, selling patient debts to collection agencies, issuing low interest tax exempt bonds and investing cash reserves in higher yielding securities. Recently the Federal Government notified all hospitals that it will no longer pay for the extra care and added costs for preventable hospital treatment errors involving falls, bloodstream infections caused by catheters, bed sores, objects left in patients during surgery, blood incompatibility, bacterial heart infections and air embolisms in the bloodstream. (air bubbles) Today one in four hospital patients have a urinary catheter inserted. The tube, left in too long, often triggers a urinary infection in the patient and hospitals have been billing Medicare and third party insurance providers for treating an infection they caused. A recent University of Michigan study found most patients didn’t need catheters and most hospitals don’t even keep medical track of the duration of how long it’s been inserted.

Another recent Dartmouth College study concluded that “higher-intensity medical hospital practices are contributing to insufficient patient care and higher medical costs.” According to this study, Medicare could save $289 billion of taxpayer costs on health care costs between 2001 and 2005 if all hospitals operated with the same due diligence that the benchmark used in the study did, which was the Mayo Clinic in Minnesota. Much of these poor business practices and thus higher costs are passed on to taxpayers, third party insurance providers and uninsured patients who are paying more for ineffective and in inefficient hospital procedures. The study also found, such inefficient hospitals had higher patient office calls, hospital stays, unnecessary diagnostic procedures and higher unnecessary doctor visits to hospital patients that added additional costs to patient care with little or no increased Medical benefit to the patient.

Total U.S. Health Care costs in 2006 were $2.1 trillion and are forecast to double to $4.3 trillion within eight years. Non-profit and government-owned hospitals like Maury Regional and Williamson Medical already have a significant competitive advantage with low interest, tax-exempt bonds for capital improvements; local, state and federal grants and subsidies; and local property tax exempt status, paying only a fraction of their fair share of local property taxes through a special in-lieu of property tax arrangement. In some cases, like Maury Regional, obtaining financial information on operational costs, or charity contributions is next to impossible because they are not required to file such information with the IRS, like other non-profit 501(c)3 hospitals, because they have received a “special wavier” for such filings because they are government-owned.

Ketron could better serve the public taxpayer and the patients who use these non-profit hospitals by requiring them to be more financially transparent and open about their “community service” contributions, administrative costs, doctor fees and other important, if not vital health care information on mortality rates and infectious diseases, like MRSA that are not required to be reported in Tennessee. By lowering health care costs and improving patient services, the public and taxpayer will be better served and the hospitals themselves will, as a result, gain a more competitive advantage.