Current Events Taxes

Should Non-Profit Hospitals get a Tax Break?

Of course they should! Non-profit hospitals treat the poorest patients in the most underserved communities using a bare bones administrative budget…right?

According to the New York Times (“Nonprofit Hospitals Face Scrutiny Over Practices“), the traditional view of non-profit hospitals as altruistic institutions may be flawed. The commissioner of internal revenue, Mark W. Everson, said tax officials often found little difference between nonprofit and for-profit hospitals “in their operations, their attention to the benefit of the community or their levels of charity care.” In fact, uninsured patients may pay more for services than the uninsured. For instance, HMOs often negotiate price discounts for their customers who receive services at non-profit hospitals; the uninsured have no one to negotiate on their behalf.

Some excerpts from the article:

  • Some nonprofit hospitals have hired debt collection agencies that “harass the poor.”
  • Some nonprofit hospitals and health systems in Minnesota have provided “lavish gifts” and “grossly excessive” compensation to top executives while providing “paltry levels” of charity care. For instance, the president of NewYork-Presbyterian Hospital, Dr. Herbert Pardes, received more than $4.3 million in compensation in 2004, plus $1.2 million in contributions to his employee benefit plan.

Do you want your tax dollars to help arbitrarily subsidize some hospitals over others? If we want to assist the uninsured, policy should help the poor to afford health insurance, either through easier access to Medicaid or (preferably) monetary transfers to these individuals.