> Why are hospitals doing the opposite to offering the best care possible to all citizens? Are they for-profit in the US?
Contrary to sibling comments, no, they generally are not. Most (58.5%) US hospitals are private nonprofits, and another 20.2% are public. Only 21.3% are private, for-profit. [0]
Contrary to your comment, yes, they generally are; they're just using Hollywood accounting and referring to their profits as "excess earnings".
"A study published in the May issue of Health Affairs revealed that in 2013, seven of the top ten most profitable hospitals in the United States were nonprofit hospitals, with each earning over $163 million in profits from patient care."
That article links to a CBS "investigation" into the University of Pittsburgh Medical Center, which claims to be a nonprofit but made $948 million from 2011 to 2012, pays its CEO $6 million a year, gets a private chef, chauffeur, and a jet for additional compensation, and has a dozen other administrators each making over a million dollars a year.
Claiming themselves to be a nonprofit saves them about $200 million in state and federal taxes. So, they're just an "accidentally profitable" nonprofit.
But yeah, sure, let's just keep taking the health care industry at its word when it says it's not profitable.
edit: more, because why use a scalpel when a hammer will work just as well?
"Many nonprofit hospitals calculate their charitable care by using something known as “charge master” pricing; exorbitant, non-negotiated prices which are inflated many times higher than what private insurance or Medicare would pay. This allows facilities to overstate their provision of “charity care,” calculated as revenue loss by the hospital in exchange for their lucrative tax exemptions. In a patient evaluated with chest pain, the allowable for Medicare is $3600; however, in an uninsured patient, the hospital may “write-off” an inflated $25,600 in uncompensated costs, which is 8 times higher than actual cost of care provided."
"But even many hospitals that showed losses on patient care had positive margins overall. The study found that median net income per adjusted discharge from all activities—including investments, charitable contributions and space rental—was $353 for all hospitals and $178 for hospitals with 50 or fewer beds."
"Non-profit is instead simply a tax status, and specifically, it exempts hospitals from paying real estate and other taxes in exchange for contributing a fixed portion of their revenues to ‘community benefit’ rather than paying dividends to shareholders. ... Cleveland Clinic, one of the largest health systems in the country, was held up as an example of a wildly profitable non-profit in a recent article in Politico."
(read that one, it's a good breakdown of the accounting that hospitals use to maintain their nonprofit status while behaving in every other way like any other for-profit business.)
> Contrary to your comment, yes, they generally are;
No, they're not.
> they're just using Hollywood accounting and referring to their profits as "excess earnings".
No, they aren't. Excess earnings are the correct technical term. Non-profit status, even in theory, has nothing to do with whether you earn more in revenue than you expend in costs, it has to do with whether there are stockholders or others who have a claim on accumulated returns.
More specifically, charitable nonprofits (which non-profit hospitals are) have a wide variety of additional requirements and restrictions (both in general, and specific additional requirements for hospitals, including several added by the ACA.)
> read that one, it's a good breakdown of the accounting that hospitals use to maintain their nonprofit status while behaving in every other way like any other for-profit business.
No, it's just a bunch of dishonest, or perhaps merely clueless, mischaracterizing; the most obvious example being considering money expended in providing Medicaid services but not covered by Medicaid reimbursement as money the hospital “paid to itself” rather than an external benefit. This isn't money the hospital paid to itself, it's money the hospital paid out to provide services under a public program providing healthcare to the medically indigent but which was not reimbursed by that public program (in general, Medicaid is a money-losing program for providers, as—while there are some exceptions—reimbursement is generally at the lowest of three things: a state set rate, the actual cost of providong the service, or the provider's usual and customary charge for the same or substantially similar service. This is at best break even, but over all, across all providers, it's always going to be, in practice, below actual cost.
In my area, the non-profit (in name only) hospital system uses aggressive pricing, advertising, and takeover tactics to drive existing hospitals out of business, buy them out, dump unprofitable patient groups, recruit profitable ones, and then hold their medical care hostage while renegotiating higher reimbursement rates with the insurance company, with no accountability and giant compensation packages for their executives.
You can deny things all you want. The behavior of some "non-profit" hospital chains is out of line with what the public and the government considers appropriate for non-profits, and constitutes tax abuse.
With revenue in the billions that doesn't represent a significant cost (Say 1% on the higher side).
I'm pretty convinced the market for CEOs in general is broken, but it's also the case that largely eliminating CEO compensation wouldn't move prices much in any business.
I have no idea about CEO compensation in general, but I'm curious what would be a reasonable salary/compensation for someone who manages several large facilities and thousands of staff, some of whom make 7 figures for their expertise. $6M plus perks doesn't seem that high to me, but maybe I'm desensitized by seeing so many other executives make gobs of money.
Contrary to sibling comments, no, they generally are not. Most (58.5%) US hospitals are private nonprofits, and another 20.2% are public. Only 21.3% are private, for-profit. [0]
[0] https://www.beckershospitalreview.com/hospital-management-ad...