Health And Wealth

Speaking of health…

When I was still practicing law, I did a fair amount of work for nonprofit organizations.

Most of the nonprofits for which I drafted articles of incorporation or amended bylaws, or those I simply represented in various transactions, were “true” nonprofits–everything from Little League teams to small “do-gooder” groups focused on addressing a social ill. I want to be clear that I am not talking about those organizations, or criticizing their tax-exempt status–a status that was intended to facilitate the provision of socially-beneficial goods and services.

But. (You knew there was a “but,” didn’t you.)

There are also far too many “nonprofit” organizations that are really cleverly-veiled for-profit business enterprises. So long as talented lawyers can describe the business with language indicating  a charitable mission of some sort, these enterprises escape both income and property taxation, padding what would otherwise be the bottom line.

And about that bottom line–rather than sending  what are actually profits to shareholders or other investors to be taxed, as for-profit enterprises do, sizable chunks of those dollars are used to inflate the salaries paid to  management personnel (who–surprise!– often were the founders of the organization), transforming them into expenses of the enterprise.

Legal magic!!

Back in my lawyering days, this was one of the many things that royally pissed me off. I  revisited that annoyance when I read a recent article by Michael Hicks in the Capital Chronicle. Hicks has periodically focused on the economic shenanigans of Indiana’s hospitals–all of which are theoretically nonprofit, and many of which actually are.

Hicks reminds us that the benefits bestowed by nonprofit status are in exchange for the  “well established notion that nonprofits advance the public good.”

Today, nearly every hospital corporation in Indiana is a not-for-profit. I’m pleased to report, that insofar as I can judge from the data, most are focused on that well established notion of ‘advancing the public good.’

In fact, it would seem that only five or six of Indiana’s not-for-profit hospital firms have dispensed with any pretense of “advancing the public good.” Now, this doesn’t mean they aren’t doing good things that folks are willing to pay for. But, so do Walmart, J.P. Morgan Bank, Amazon, and McDonalds. One key difference is that we tax these for-profit firms.

Hicks then tells us that, in 2020, the nation’s largest for-profit hospital, HCA, reported a 7.3% profit. That same year, Ascension Health in Indiana reported a 41% profit, Community Health Network reported 23.3%, IU health reported 22% and Deaconess reported 13.8%. As he writes, this is flagrant misuse of the not-for-profit status.

If these were for-profit firms, their investors would’ve had a windfall. Instead, they put that money in money market accounts, or offshore investments. That money should flow back into Hoosier communities instead of leaving the state. The losses are startling. Roughly 60% of all the economic growth in Muncie over the last decade was swallowed just by the profits of IU Health and Ball Memorial Hospital.

The article then focused on Ascension St. Vincent, which recently announced plans to close 11 clinics in Indiana.

Now, I’m sure this was a random coincidence that had nothing to do with pending legislation aimed at their monopoly power. If reporting is true, most of these clinics were profitable. Of course, system-wide, Ascension is fabulously profitable. In the last year for which we have data, they reported making a profit of more than $308, 000 per employee, less than half of which was from healthcare services.  Ascension Health is today a financial services firm that claims heritage from Catholic charities, but now only dabbles in healthcare.

The decision to close less profitable clinics would be a typical business decision of a venture capital firm. But, it is wholly incompatible with the “notion that nonprofits advance the public good.” Ascension is a ‘not-for-profit’ entity in name only. Its behavior is that of a large conglomerate. They are not alone. In 2020, IU Health reported a tad more than $4 billion in physical assets in Indiana. Their investment holdings were $7.8 billion. They also made $49,600 per worker in profits in 2020.

There is much more data in the article, all of which supports Hick’s thesis that “these big ‘hospitals’ are really just large financial services firms, who own construction firms, physician offices, restaurants and yes, hospitals.” If Indiana had a legislature that focused on the welfare of Hoosiers, that body might remove the nonprofit status of systems behaving like venture capitalists.

 Removing the not-for-profit status would generate huge tax dollars for cities across Indiana, expose these hospitals to federal laws on non-compete and increase the probability of enforcement of anti-trust regulations.

Welcome to yet another aspect of privatized health care…It costs Americans a lot to reject the “socialism” of a national health system.


Your Religion, My Body–Happy Mother’s Day

It’s Mother’s Day–an appropriate time to think about human reproduction.

So…let me suggest a science fiction scenario.

We’re 25 years into the future. In reaction to massive population growth, NoNo, a religion encouraging ritual sterilization, has become the majority religion  in the U.S.  Practitioners believe (sincerely and devoutly) that God wants humans to avoid reproduction. (This religion’s conception of Diety is noncommittal on sex–it’s just making babies She is discouraging.)

As this religious community has grown, it has come to control the majority of the nation’s hospitals; well over 60% of them have become part of a national network of medical facilities run by and faithful to NoNo principles.

Our protagonist is not a NoNo, but she lives in a small town with only one hospital, and it is part of the NoNo network. She suddenly becomes ill. She is taken to the hospital in her area, where she is diagnosed with a treatable condition that will require minor surgery–and she’s told that, according to the tenets of NoNo, she will also be sterilized during the procedure. She objects–she’s only twenty, has never had children and desperately wants to be a mother–but her objections are deemed irrelevant. She is deprived of her control over her own body and any chance of having biological children.

Far fetched? Not if you switch the text.

The California Medical Association is seeking to join the ACLU of Northern California in its lawsuit against a Catholic hospital system over one of its facilities’ refusal on religious grounds to allow a doctor to perform a tubal ligation after a planned Cesarean section….

The suit stems from a case at Mercy Medical Center in Redding, one of Dignity Health’s 29 hospitals across the state. Mercy Medical says its refusal to perform the procedure was based on the Ethical and Religious Directives for Catholic Health Care Services, written by the U.S. Conference of Catholic Bishops. The Directives – followed by all of California’s 35 Catholic hospitals – prohibit birth control, abortion and, in most cases, sterilization.

The California Medical Association says hospitals should make decisions that are medically appropriate–and should not make medical decisions that are contrary to best practices for reasons of religious dogma, especially when the patient does not accept that dogma.

Civil libertarians–in this case, the ACLU–say individuals should not have to cede control over their bodies and beliefs in order to receive medical care.

Over the past quarter-century or so, Catholic hospitals have assumed control of a significant percentage of the nation’s hospitals. What the courts need to decide is whether the merger of these hospitals entitles the Church to dictate medical decisions that would at best be considered “non-standard” or at worse would constitute malpractice.

Because God.

Suddenly, my “science fiction” scenario doesn’t look so far-fetched. As I’ve said before–a government with the power to prohibit abortion (or birth control) is a government with the power to require it. As a friend used to put it, poison gas is a great weapon until the wind shifts.

Unless the courts rule otherwise, hospitals with a monopoly on medical care can impose their own rules. Based upon their religious beliefs. No matter which way medical science’s winds blow.