In theory, nonprofit hospital systems aren’t such a bad idea. More than half of the roughly 5,000 hospitals in the U.S are nonprofit. These hospitals are important because they provide services, such as free care for the poor, that will benefit the communities in which they operate.
In exchange for these key services for communities in need, they enjoy lucrative tax breaks. On the face of it, it’s not a bad idea. But of course, this assumes that anything in our healthcare system worked as intended.
Nonprofit hospitals actually do turn a profit. And not just a modest profit that gets reinvested into the business so that the charitable hospital system can expand and service more people. We are talking about profits in the billions.
Over the past few decades, most nonprofit hospital systems have strayed from their original charitable missions to become laser-focused on their bottom line. Today, these hospitals have become virtually indistinguishable from for-profit companies. Yet, they still benefit from local, state, and federal tax breaks.
And that’s just the tip of the iceberg. The New York Times investigated one specific nonprofit hospital system, and what they found was shocking. It turns out that Providence, one of the country’s largest nonprofit hospital systems, not only turns an immense profit and benefits from billions of dollars in tax breaks, but they have also denied free health care to those that qualify. Hospital officials have even sent debt collectors to collect payments from people who should never have had to pay for care in the first place.
If you’ve ever been admitted to a hospital, you know they want to be paid quickly
So how do they do this? Investigators found that when a patient eligible for free care under state law comes into a Providence hospital, the staff is trained to immediately and forcibly ask, “How would you like to pay for that today?” There is even a training document titled “Don’t accept the first ‘No’,” which encourages staff to continue pushing even after a patient says they cannot afford to pay.
The playbook is simple. Ask the patient to pay regardless of their income. No? Ask them to pay again. Still no? Ask them to pay for half. No Again? Put them on a payment plan. The goal of the playbook for Providence was to not inform patients of any financial assistance they may qualify for and collect whatever money they could from patients.
The New York Times article goes on to detail some horrifying first-hand accounts of patients that came into a Providence hospital at one of the worst moments in their lives and were immediately asked for money after receiving care.
The key takeaway? We probably sound like a broken record, but our healthcare system desperately needs a major overhaul. How can nonprofits like Providence bring in billions of dollars in profit, not pay their fair share of taxes, treat the communities they are supposed to serve with such a lack of compassion, and not be held accountable?
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