These Hospitals Make The Most Money Off Patients — And They’re Mostly Nonprofits

[Igel]

3. There's no winning.

Too many judgmental people.

"That's a crummy hospital. They should invest in infrastructure."

"They make too much in profit off of patient services. They should reduce all other spending to reduce prices."

"Look, they should have all kinds of ancillary services that aren't directly related to patient services."

"It's horrible that the recession put that hospital out of business. They should have had a reserve."

"Look, I'm in favor of bailing out non profits, but not religious ones."

This report ignored infrastructure; it ignored any services that weren't related to the core patient services, such as counseling, free clinics, outreach. It ignored the fiscal situation of these hospitals. It ignored whether these profits subsidize other members in their network that do lose money. What we *don't* know about these non-profits far exceeds what we *do* know.

I was involved with a non-profit. People looked at one portion of its services and said it was immoral. But it kept no revenue, being yoked with three additional organizations that it funded. It paid above minimum wage, but they wanted higher wages. When a recession hit it had $0 in reserves, and went in the red, but nobody wanted it to reduce wages or cut funding to the ancillary organizations. It finally had to have a crippling bailout that put some onerous conditions on it, and if we defaulted on any of those conditions we could go into a kind of corporate receivership.

There are limited places a non-profit can put money, and the problem with reserves is that everybody knows better how to spend your money to accomplish their missions than you do.