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Businesses Medicine United States

Big Nonprofit Hospitals Expand in Wealthier Areas, Shun Poorer Ones (wsj.com) 216

Many of the nation's largest nonprofit hospital systems, which give aid to poorer communities to earn tax breaks, have been leaving those areas and moving into wealthier ones as they have added and shed hospitals in the last two decades. From a report: As nonprofits, these regional and national giants reap $8.8 billion from tax breaks annually, by one Johns Hopkins University researcher's estimate. Among their obligations, they are expected to provide free medical care to those least able to afford it. Many top nonprofits, however, avoid communities where more people are likely to need that aid, according to a Wall Street Journal analysis of nearly 470 transactions. As these systems grew, many were more likely to divest or close hospitals in low-income communities than to add them.

Since 2001, half the hospitals divested by CommonSpirit Health, a large Catholic system based in Chicago, were in communities where the poverty rate was above the medians for state hospital markets, compared with 30% of those it added. At Bon Secours Mercy Health, formed by the 2018 merger of two growing regional nonprofits, about 42% of hospitals it divested were in areas with higher poverty, compared with 27% of hospitals it added. Of hospitals divested or closed by St. Louis-based Ascension, about half were located in higher-poverty areas, compared with 40% of the Catholic system's acquisitions.

At the same time, many top nonprofits were moving more aggressively to add hospitals in more affluent areas. At Mercy, a St. Louis-based hospital nonprofit, 56% of new hospitals were in places with lower poverty rates, compared with 25% of those it shed. About two-thirds of the hospitals it added were in markets where the share of households with incomes of at least $200,000 was above the state median. That compared with 25% of those the system shed. Of hospitals acquired by Florida-based AdventHealth, nearly two-thirds were in low-poverty areas, compared with 40% of those they divested. And 59% had a larger share of higher-income households, compared with 40% of those they exited.

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Big Nonprofit Hospitals Expand in Wealthier Areas, Shun Poorer Ones

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  • obviously? (Score:5, Insightful)

    by itzdandy ( 183397 ) on Monday December 26, 2022 @02:02PM (#63159040) Homepage

    No shit. 'non profit' and 'for profit' has little bearing on bills getting paid. 'non profit' also being primarily a tax dodge and not an altruistic design for a hospital in America.

    As long as health is a product this is what SHOULD be expected. It's a design feature of capitalism. If health is a product, then capitalist outcomes are the obvious and expected result.

    • No shit. 'non profit' and 'for profit' has little bearing on bills getting paid. 'non profit' also being primarily a tax dodge and not an altruistic design for a hospital in America.

      Another example, Ikea is a non-profit. The company rents the name "Ikea" from a company that is probably owned by the family that founded Ikea.

    • 'Non profit' is basically a bookkeeping format, that thinly veiled vulture capitalists hide behind
    • by hey! ( 33014 )

      Having spent a significant fraction of my career in the non-profit sector, I am in some ways less cynical about it, and in some ways more. There are a lot of sincere people doing real good in the non-profit world, so it's not just a tax dodge; however there is enormous potential for abuse because of lack of accountability. Really it all comes down to whether you have a good board or not. In a for profit the board holds the CEO accountable, and the stockholders elect the board, but in the non-profit world

      • certain industries break pattern massively. non-profit hospitals are one. Funneling huge sums of money into for-profit specialty services and funding massive salaries for less-than-critical people like consultants or board members as the standard model. It's pure corruption.

      • by kenh ( 9056 )

        What should happen is that the government needs to make sure boards and non-profit management is professional and serves the organization mission, but no attorney general wants to do that kind of work. Who wants a reputation as being tough on charities? But it would be the best thing for charities.

        BLM (the non-profit charity) went on for way too long for just this reason.

    • To operate as a nonprofit you still need to make money on those who can pay to have something left for the ones who canâ(TM)t pay. The wealthier people wonâ(TM)t go to a hospital in a poorer area out of safety concerns and perception of that hospitals ability so the hospitals effectively move to richer areas. This also helps with operating costs such as insurance and security and the ability to hire as less staff want to work in areaâ(TM)s where they donâ(TM)t feel safe
      • right. non-profit doesn't mean non-capitalist. Still in the system, still using the capitalist model to select services to offer and price those services and importantly in the context of the OP, pick where to locate.

        Even if it were a completely altruistic non-profit business these rules still apply. Nurses are going where they get paid, doctors are going where they get paid. heck, janitors are going where they get paid. The CEO is going where they get paid. Nothing is 'cheaper' just because it's in a

        • Let's see how well medical care works when we start mandating reduced pay for doctors and nurses.

    • Doctors also prefer working close to where they live. And guess where they prefer to live?

    • It also means that, in the United States, when you stop running your hospital on the basis of healthcare being a product, your hospital goes out of business. Poorer areas have high percentages of payers relying on Medicaid and Medicare. Know what happens to those hospitals? They die.

  • Interesting tidbit (Score:5, Interesting)

    by quonset ( 4839537 ) on Monday December 26, 2022 @02:12PM (#63159088)

    Of the hospital systems named in the blurb, the vast majority are Christian/Catholic-based. These same hospitals are abandoning the poor.

    • by gweihir ( 88907 )

      For most people, being a member of a mainstream religion is not about being a good person. It is about _pretending_ to be a good person. Essentially a form of virtue signalling and just as dishonest.

  • Being in an area where billable customers exist makes it more likely to be able to pay bills to keep the hospital open.

    In our area, there are now a LOT of small clinics for major hospitals, specializing in different things, and NOT requiring people to "check in" to get help. They exist closer to the low-income areas the larger hospital isn't in.

    There is daily rescue squad traffic transferring people between these lower-cost facilities and the bigger hospitals, though, but that wouldn't be covered in an arti

    • Yeah but I completely defeats the purpose of having non-profit healthcare systems with massive tax breaks. The Entire purpose of these is that they're supposed to service communities that can't support profitable healthcare.

      The fact that they don't do that is just further proof that healthcare shouldn't be a for-profit industry. But if you say that everybody freaks out because they think you're not going to pay doctors and nurses on what you really mean is you're not going to pay CEOs to do nothing but
  • by EzInKy ( 115248 ) on Monday December 26, 2022 @02:15PM (#63159112)

    There is absolutely no reason why anybody in the richest nation on Earth should be without healthcare or go hungry.

    • There is absolutely no reason why anybody in the richest nation on Earth should be without healthcare or go hungry.

      There absolutely is. People like the Koch family might have an insignificant reduction in their net wealth. Isn't that good enough reason for you?

      • Re: (Score:3, Insightful)

        by PPH ( 736903 )

        There aren't enough Koch families to fund this. We've run the numbers here in the past. Take all the billionaires, rich CEOs, etc, line them up and shake them down. And you've got maybe 5% more revenue to distribute around.

        But before the shakedown, watch nearly 100% of them move their wealth producing operations off shore. You know. The ones you count on to hand you a paycheck.

        • There are two problems with US healthcare, but they are linked.

          1. It's too expensive. The US already spends a higher proportion of GDP than other countries.
          2. Far too many people don't have coverage.

          You may be correct that a few billionaires cannot fund healthcare for all (my comment was an exaggeration), but, if we converted the insurance premiums to taxes, there would be plenty of money to fund a government healthcare scheme for all.

        • by sjames ( 1099 )

          If we first implement the cost controls that every other 1st world country has, we immediately cut the bill in half.

          • by PPH ( 736903 )

            A worthy endeavor. Let me know how that turns out.

            Seriously, there are some fundamental problems with lobbyists powers over Congress that you'll have to solve first.

    • Spoken by someone completely clueless. Medicare for All! Who is going to pay the premiums? The government takes 3+% of your lifetime w2 earnings and pays the part A premium, Individuals on medicare are responsible for the premium on part B, the premium for Advantage or a Supplement(for all the stuff the government wont cover) and when both the government and the insurance companies exempt themselves from paying the bill is sent to the individual. Medicare for All! right!
      • by EzInKy ( 115248 )

        Part B is the standard 80/20 most of us grew up with. Yes, there are advantage plans that can help pay expenses not covered. I see that as a good thing.

      • Who is going to pay the premiums? The government takes 3+% of your lifetime w2 earnings

        You answered your own question. Everybody pays, everybody gets, that's kindof the whole concept about a single payer system or most public programs. Social Security is effectively the same concept. You can even say that about the military as a concept.

        Also as far I am aware the actual bill and program doesn't have the "Part A, Part B" system the current Medicare does.

        I am not even a huge fan of the M4A bill (i don't think it's feasible in the US to effectivelyt outlaw private insurers and other nations

      • Spoken by someone completely clueless. Medicare for All! Who is going to pay the premiums?

        Everyone. Why is this even a question? In every other advanced nation on the planet healthcare premiums are socialised for the benefit of society.
        But the only thing America socialises is bailouts for wallstreet and car companies.

    • Federal Employees know the truth about Medicare. They have exempted themselves and setup their own Gold Plated Heath care plan.
      • So let's make the plans the FEHB offers employees standard for everyone. Easy.

        Also there is no option for people with jobs to buy into Medicare, just like if I earn over $X dollars in ym job I do not qualify for Medicare, that's part of the law as written. If there was a public Medicare buy in option maybe more Federal Employees would actually make that choice.

    • "Medicare" is exactly the reason these hospitals are being divested.

      The American Hospital Association (AHA) estimated that Medicaid payments to hospitals amounted to 90 percent of the costs of patient care in 2013, while Medicare paid 88 percent of costs; by contrast, hospitals received considerable overpayment from private insurers, amounting to 144 percent of costs.

      -- Understanding Medicaid Hospital Payments [kff.org]

      The only way you can take patients where you only receive a partial reimbursement for treating them is if you have a sufficient proportion of privately insured and patients with high-margin (i.e. elective) procedures to cover the difference. Hospitals in poorer areas that accept the government's terms are becoming insolvent. Other hospitals are simply refusing to take medicare/medicaid patients [kevinmd.com] in

      • by sjames ( 1099 )

        Of course, with all of the Hollywood accounting going on, it's a bit confusing. Medicare pays 88% of the stupid crazy costs the hospital claims. Kinda like they bill aspirin at $8 each and call that the cost. Then they bill Medicare and get paid $0.10 instead . Then the hospital screams that they're being underpaid and it's so unfair!. Meanwhile they actually paid $0.02 for the aspirin.

  • ...It's not cheap to provide low cost or free health care.

    Funny.

  • Serious question (Score:5, Insightful)

    by Bodhammer ( 559311 ) on Monday December 26, 2022 @02:36PM (#63159208)
    Given - The need for healthcare approaches infinity. I.e. goal is every single person on earth to be in perfect health for a long a life as possible. (don't forget pets, endagnered species, zoo animals, etc.) Challenge question for those who want to change the subject. If this is not the goal, what is it?

    Given - Health care resources are finite. If not finite, why and proof please

    Question - What is the "best" (fairest, most efficient, etc. ) way to allocate resources to healthcare? Bonus question - Who decides?
    • First we have to define"best" as a metric. I would say a good way is outcomes for cost, at which the US is not the best but not the worst but middling. We get decent outcomes but pay by far the most, far more than other nations with more equitable, accessible and overall cheaper systems.

      A healthy society is a productive and happy one and that benefits everyone in it, even the healthiest amongst us. If we believe that than the system of care that is the best gives the best care to the most people.

      The quest

    • by PPH ( 736903 )

      Question - What is the "best"

      Death panels [wikipedia.org].

      We could start with legalizing assisted suicide. And extending the definition of an approved provider to include Fentanyl dealers. Also, outlaw the administration of Naloxone for people who have not made an explicit request for revival (Medic Alert bracelet, etc.)

      • by sjames ( 1099 )

        The elephant in the room is that we have private death panels now. What else would you call it if an insurance company refuses to pay?

        The politicians don't want to call those 'death panels' because they invented the term to discredit universal health care and know that the only thing worse than a public government death panel is a secret corporate death panel where bonuses are paid for saving money.

    • Healthcare resources aren't finite. Just like food we've long since reached the point where we can produce enough health Care to cover the needs of everyone. The only thing holding us back are people who can't imagine a world without scarcity and my hand called people who live very well thanks to artificial scarcity.
    • by sjames ( 1099 )

      You missed that many of the things that make people not perfectly healthy are things modern medicine can't do a damned thing about. Since one of those eventually kills you, costs are finite.

  • OK, how about setting up non-profit bus services that take patients from poor areas to where the non-profit hospitals are? Problem solved! :)
      • Actually, to ERs too. Have you heard/read the stories &/or seen the videos of people who get seriously ill or injured but beg passers by not to call an ambulance because they're afraid of getting fleeced by the ambulance companies? If you're poor in the USA, the bus or a taxi or a neighbour with a car are probably your best bet to avoid bankruptcy in emergencies.
  • by yaznaz ( 4678625 ) on Monday December 26, 2022 @02:49PM (#63159250)
    Even if they are non-profit, they need to attract doctors and will be located where it is easier for doctors to commute to work. No point building a hospital in a locality where no doctor would be willing to work. Inconvenient, but better then no hospital.
  • "Nonprofit" in that profit is made in a separate entity from the "hospital"-- a real-estate entity that the hospital pays rent to and various other machinations so the "owners" still benefit. Plenty of profit in nonprofit...

  • What an unexpected find! /s

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