Elisabeth Rosenthal
Mon, 29 Jul 2024 09:00:00 +0000

One owns a for-profit insurer, a venture capital company, and for-profit hospitals in Italy and Kazakhstan; it has just acquired its fourth for-profit hospital in Ireland. Another owns one of the largest for-profit hospitals in London, is partnering to build a massive training facility for a professional basketball team, and has launched and financed 80 for-profit start-ups. Another partners with a wellness spa where rooms cost $4,000 a night and co-invests with “leading private equity firms.”

Do these sound like charities?

These diversified businesses are, in fact, some of the country's largest nonprofit hospital systems. And they have somehow managed to keep myriad for-profit enterprises under their nonprofit umbrella — a status that means they pay little or no taxes, float bonds at preferred rates, and gain numerous other financial advantages.

Through legal maneuvering, regulatory neglect, and a large dollop of lobbying, they have remained tax-exempt charities, classified as 501(c)(3)s.

“Hospitals are some of the biggest businesses in the U.S. — nonprofit in name only,” said Martin Gaynor, an economics and public policy professor at Carnegie Mellon University. “They realized they could own for-profit businesses and keep their not-for-profit status. So the parking lot is for-profit; the laundry service is for-profit; they open up for-profit entities in other countries that are expressly for making money. Great work if you can get it.”

Many universities' most robust income streams come from their technically nonprofit hospitals. At Stanford University, 62% of operating revenue in fiscal 2023 was from health services; at the University of Chicago, patient services brought in 49% of operating revenue in fiscal 2022.

To be sure, many hospitals' major source of income is still likely to be pricey patient care. Because they are nonprofit and therefore, by definition, can't show that thing called “profit,” excess earnings are called “operating surpluses.” Meanwhile, some nonprofit hospitals, particularly in rural areas and inner cities, struggle to stay afloat because they depend heavily on lower payments from Medicaid and Medicare and have no alternative income streams.

But investments are making “a bigger and bigger difference” in the bottom line of many big systems, said Ge Bai, a professor of health care accounting at the Johns Hopkins University Bloomberg School of Public Health. Investment income helped Cleveland Clinic overcome the deficit incurred during the pandemic.

When many U.S. hospitals were founded over the past two centuries, mostly by religious groups, they were accorded nonprofit status for doling out free care during an era in which fewer people had insurance and bills were modest. The institutions operated on razor-thin margins. But as more Americans gained insurance and medical treatments became more effective — and more expensive — there was money to be made.

Not-for-profit hospitals merged with one another, pursuing economies of scale, like joint purchasing of linens and surgical supplies. Then, in this century, they also began acquiring parts of the health care systems that had long been for-profit, such as doctors' groups, as well as imaging and surgery centers. That raised some legal eyebrows — how could a nonprofit simply acquire a for-profit? — but regulators and the IRS let it ride.

And in recent years, partnerships with, and ownership of, profit-making ventures have strayed further and further afield from the purported charitable health care mission in their community.

“When I first encountered it, I was dumbfounded — I said, ‘This not charitable,'” said Michael West, an attorney and senior vice president of the New York Council of Nonprofits. “I've long questioned why these institutions get away with it. I just don't see how it's compliant with the IRS tax code.” West also pointed out that they don't act like charities: “I mean, everyone knows someone with an outstanding $15,000 bill they can't pay.”

Hospitals get their tax breaks for providing “charity care and community benefit.” But how much charity care is enough and, more important, what sort of activities count as “community benefit” and how to value them? IRS guidance released this year remains fuzzy on the issue.

Academics who study the subject have consistently found the value of many hospitals' good work pales in comparison with the value of their tax breaks. Studies have shown that generally nonprofit and for-profit hospitals spend about the same portion of their expenses on the charity care component.

Here are some things listed as “community benefit” on hospital systems' 990 tax forms: creating jobs; building energy-efficient facilities; hiring minority- or women-owned contractors; upgrading parks with lighting and comfortable seating; creating healing gardens and spas for patients.

All good works, to be sure, but health care?

What's more, to justify engaging in for-profit business while maintaining their not-for-profit status, hospitals must connect the business revenue to that mission. Otherwise, they pay an unrelated business income tax.

“Their CEOs — many from the corporate world — spout drivel and turn somersaults to make the case,” said Lawton Burns, a management professor at the University of Pennsylvania's Wharton School. “They do a lot of profitable stuff — they're very clever and entrepreneurial.”

The truth is that a number of not-for-profit hospitals have become wealthy diversified business organizations. The most visible manifestation of that is outsize executive compensation at many of the country's big health systems. Seven of the 10 most highly paid nonprofit CEOs in the United States run hospitals and are paid millions, sometimes tens of millions, of dollars annually. The CEOs of the Gates and Ford foundations make far less, just a bit over $1 million.

When challenged about the generous pay packages — as they often are — hospitals respond that running a hospital is a complicated business, that pharmaceutical and insurance execs make much more. Also, board compensation committees determine the payout, considering salaries at comparable institutions as well as the hospital's financial performance.

One obvious reason for the regulatory tolerance is that hospital systems are major employers — the largest in many states (including Massachusetts, Pennsylvania, Minnesota, Arizona, and Delaware). They are big-time lobbying forces and major donors in Washington and in state capitals.

But some patients have had enough: In a suit brought by a local school board, a judge last year declared that four Pennsylvania hospitals in the Tower Health system had to pay property taxes because its executive pay was “eye popping” and it demonstrated “profit motives through actions such as charging management fees from its hospitals.”

A 2020 Government Accountability Office report chided the IRS for its lack of vigilance in reviewing nonprofit hospitals' community benefit and recommended ways to “improve IRS oversight.” A follow-up GAO report to Congress in 2023 said, “IRS officials told us that the agency had not revoked a hospital's tax-exempt status for failing to provide sufficient community benefits in the previous 10 years” and recommended that Congress lay out more specific standards. The IRS declined to comment for this column.

Attorneys general, who regulate charity at the state level, could also get involved. But, in practice, “there is zero accountability,” West said. “Most nonprofits live in fear of the AG. Not hospitals.”

Today's big hospital systems do miraculous, lifesaving stuff. But they are not channeling Mother Teresa. Maybe it's time to end the community benefit charade for those that exploit it, and have these big businesses pay at least some tax. Communities could then use those dollars in ways that directly benefit residents' health.

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By: Elisabeth Rosenthal
Title: Why Many Nonprofit (Wink, Wink) Hospitals Are Rolling in Money
Sourced From: kffhealthnews.org/news/article/commentary-nonprofit-hospitals-rolling-in-money/
Published Date: Mon, 29 Jul 2024 09:00:00 +0000

Did you miss our previous article…
https://www.galvestontrendingnews.com/kaiser-health-news/maternity-care-in-rural-areas-is-in-crisis-can-more-doulas-help/

Jess Mador, WABE
Mon, 29 Jul 2024 09:00:00 +0000

When Bristeria Clark went into labor with her son in 2015, her contractions were steady at first. Then, they stalled. Her cervix stopped dilating. After a few hours, doctors at Phoebe Putney Memorial Hospital in Albany, Georgia, prepped Clark for an emergency cesarean section.

It wasn't the vaginal birth Clark had hoped for during her pregnancy.

“I was freaking out. That was my first child. Like, of course you don't plan that,” she said. “I just remember the gas pulling up to my face and I ended up going to sleep.”

She remembered feeling a rush of relief when she woke to see that her baby boy was healthy.

Clark, a 33-year-old nursing student who also works full-time in county government, had another C-section when her second child was born in 2020. This time, the cesarean was planned.

Clark said she's grateful the physicians and nurses who delivered both her babies were kind and caring during her labor and delivery. But looking back, she said, she wishes she had had a doula for one-on-one support through pregnancy, childbirth, and the postpartum period. Now she wants to give other women the option she didn't have.

Clark is a member of Morehouse School of Medicine's first class of rural doulas, called Perinatal Patient Navigators.

The program recently graduated a dozen participants, all Black women from southwestern Georgia. They have completed more than five months of training and are scheduled to begin working with pregnant and postpartum patients this year.

“We're developing a workforce that's going to be providing the support that Black women and birthing people need,” Natalie Hernandez-Green, an associate professor of obstetrics and gynecology at Morehouse School of Medicine, said at the doula commencement ceremony in Albany, Georgia.

Albany is Morehouse School of Medicine's second Perinatal Patient Navigator program site. The first has been up and running in Atlanta since training began in the fall of 2022.

Georgia has one of the highest rates of maternal mortality in the country, according to an analysis by KFF, a health information nonprofit that includes KFF Health News. And Black Georgians are more than twice as likely as white Georgians to die of causes related to pregnancy.

“It doesn't matter whether you're rich or poor. Black women are dying at [an] alarming rate from pregnancy-related complications,” said Hernandez-Green, who is also executive director of the Center for Maternal Health Equity at Morehouse School of Medicine. “And we're about to change that one person at a time.”

The presence of a doula, along with regular nursing care, is associated with improved labor and delivery outcomes, reduced stress, and higher rates of patient satisfaction, according to the American College of Obstetricians and Gynecologists.

Multiple studies also link doulas to fewer expensive childbirth interventions, including cesarean births.

Doulas are not medical professionals. They are trained to offer education about the pregnancy and postpartum periods, to guide patients through the health care system, and to provide emotional and physical support before, during, and after childbirth.

Morehouse School of Medicine's program is among a growing number of similar efforts being introduced across the country as more communities look to doulas to help address maternal mortality and poor maternal health outcomes, particularly for Black women and other women of color.

Now that she has graduated, Clark said she's looking forward to helping other women in her community as a doula. “To be that person that would be there for my clients, treat them like a sister or like a mother, in a sense of just treating them with utmost respect,” she said. “The ultimate goal is to make them feel comfortable and let them know ‘I'm here to support you.'” Her training has inspired her to become an advocate for maternal health issues in southwestern Georgia.

Grants fund Morehouse School of Medicine's doula program, which costs $350,000 a year to operate. Graduates are given a $2,000 training stipend and the program places five graduates with health care providers in southwestern Georgia. Grant money also pays the doulas' salaries for one year. 

“It's not sustainable if you're chasing the next grant to fund it,” said Rachel Hardeman, a professor of health and racial equity at the University of Minnesota School of Public Health.

Thirteen states cover doulas through Medicaid, according to the Georgetown University Center for Children and Families.

Hardeman and others have found that when Medicaid programs cover doula care, states save millions of dollars in health care costs. “We were able to calculate the return on investment if Medicaid decided to reimburse doulas for pregnant people who are Medicaid beneficiaries,” she said.

That's because doulas can help reduce the number of expensive medical interventions during and after birth, and improving delivery outcomes, including reduced cesarean sections.

Doulas can even reduce the likelihood of preterm birth. 

“An infant that is born at a very, very early gestational age is going to require a great deal of resources and interventions to ensure that they survive and then continue to thrive,” Hardeman said.

There is growing demand for doula services in Georgia, said Fowzio Jama, director of research for Healthy Mothers, Healthy Babies Coalition of Georgia. Her group recently completed a pilot study that offered doula services to about 170 Georgians covered under Medicaid. “We had a waitlist of over 200 clients and we wanted to give them the support that they needed, but we just couldn't with the given resources that we had,” Jama said.

Doula services can cost hundreds or thousands of dollars out-of-pocket, making it too expensive for many low-income people, rural communities, and communities of color, many of which suffer from shortages in maternity care, according to the March of Dimes.

The Healthy Mothers, Healthy Babies study found that matching high-risk patients with doulas — particularly doulas from similar racial and ethnic backgrounds — had a positive effect on patients. 

“There was a reduced use of pitocin to induce labor. We saw fewer requests for pain medication. And with our infants, only 6% were low birth weight,” Jama said.

Still, she and others acknowledge that doulas alone can't fix the problem of high maternal mortality and morbidity rates.

States, including Georgia, need to do more to bring comprehensive maternity care to communities that need more options, Hardeman said.

“I think it's important to understand that doulas are not going to save us, and we should not put that expectation on them. Doulas are a tool,” she said. “They are a piece of the puzzle that is helping to impact a really, really complex issue.”

In the meantime, Joan Anderson, 55, said she's excited to get to work supporting patients, especially from rural areas around Albany.

“I feel like I'm equipped to go out and be that voice, be that person that our community needs so bad,” said Anderson, a graduate of the Morehouse School of Medicine doula program. “I am encouraged to know that I will be joining in that mission, that fight for us, as far as maternal health is concerned.”

Anderson said that someday she wants to open a birthing center to provide maternity care. “We do not have one here in southwest Georgia at all,” Anderson said.

In addition to providing support during and after childbirth, Anderson and her fellow graduates are trained to assess their patients' needs and connect them to services such as food assistance, mental health care, transportation to prenatal appointments, and breastfeeding assistance.

Their work is likely to have ripple effects across a largely rural corner of Georgia, said Sherrell Byrd, who co-founded and directs SOWEGA Rising, a nonprofit organization in southwestern Georgia.

“So many of the graduates are part of church networks, they are part of community organizations, some of them are our government workers. They're very connected,” Byrd said. “And I think that connectedness is what's going to help them be successful moving forward.”

This reporting is part of a fellowship with the Association of Health Care Journalists supported by The Commonwealth Fund. It comes from a partnership that includes WABE, NPR, and KFF Health News.

——————————
By: Jess Mador, WABE
Title: Maternity Care in Rural Areas Is in Crisis. Can More Doulas Help?
Sourced From: kffhealthnews.org/news/article/doulas-rural-maternity-care-georgia/
Published Date: Mon, 29 Jul 2024 09:00:00 +0000

Phil Galewitz, KFF Health News
Fri, 26 Jul 2024 09:00:00 +0000

The National Education Association, the nation's largest union, is threatening to cut off health insurance to about 300 Washington, D.C.-based workers on Aug. 1 in an effort to end a bitter contract dispute.

It's a tactic some private employers have used as leverage against unionized workers that has drawn scrutiny from congressional Democrats and is prohibited for state employers in California. Experts on labor law say they've never seen a union make the move against its own workers.

“This is like a man-bites-dog situation where the union is now in a position as the employer,” said Paul Clark, a professor of labor and employment relations at Penn State University. “It's not a good look for a union.”

NEA workers with pressing health needs are worried but say they won't fold. Joye Mercer Barksdale, a writer on the NEA's government relations team, said she needs coverage for a medical procedure to address atrial fibrillation, a cardiac disorder. “This is insane for the NEA to use our health benefits as a bargaining chip,” she said.

But Barksdale said the threat isn't enough to force her to agree to an unacceptable contract. “I am not ready to give in,” she said.

The NEA Staff Organization, the union representing workers at the NEA's headquarters, launched a strike on July 5 in Philadelphia, during the union's annual delegate assembly. It was its second walkout this summer as the two parties negotiate a new contract, navigating sticking points such as wages and remote work.

In response, the NEA ended the conference early. President Joe Biden was supposed to speak at the event but withdrew, refusing to cross the picket line. The NEA on July 24 endorsed Kamala Harris for president.

On July 8, the day after the conference had been scheduled to end, the NEA locked out workers. In a letter the day before, the NEA informed its unionized workers that they would not be paid, effective immediately, and their health benefits would expire at the end of July unless a new deal were reached.

“NEA cannot allow NEASO to act again in a way that will bring such lasting harm to our members and our organization,” Kim Anderson, the NEA's executive director, wrote in the letter, obtained by KFF Health News. “We are, and have always been, committed both to our union values and to the importance of conducting ourselves as a model employer.”

Democrats in Congress, including Sens. Sherrod Brown of Ohio and Bob Casey of Pennsylvania, introduced legislation last year to protect striking workers from losing their health benefits, after several large companies, including General Motors, John Deere, RTX (formerly Raytheon Technologies), and the maker of Kellogg's cereals, threatened to or did cut off coverage during labor disputes.

“Workers shouldn't have to choose between their family's health and a fair contract,” Brown said in a statement to KFF Health News.

The legislation was endorsed by large labor unions including the Service Employees International Union and United Steelworkers, according to a press release from Brown's office. The NEA wasn't among them.

“This tactic is immoral, and it should be illegal,” United Steelworkers' president at the time, Thomas Conway, said in the release.

Officials at the NEA, which represents teachers and other administrators, declined an interview request. In a statement, the organization's president, Becky Pringle, said “we are making every effort to reach an agreement as quickly as possible” with its staff union.

“As union leaders who have been on strike, we recognize the significance and impact of these important decisions on a personal and family level. We truly value our employees and look forward to continued collaboration with NEASO to develop a new contract that benefits us all,” she said.

Kate Hilts, a digital strategist who works for the NEA, said she fears losing her coverage will leave her unable to afford treatment for a rare autoimmune disease that attacks her kidneys. Her next treatment was slated for August.

“I wake up every day and can't believe this is happening,” she said. “You would expect this from an employer that is antiworker or has a terrible labor record, but I am totally flabbergasted that a labor union would do this that bills itself as pro-worker, pro-family, pro-education, and pro-children.”

The NEA staff union has filed multiple charges with the National Labor Relations Board this year, including allegations that the NEA withheld holiday overtime pay and failed to provide information on the outsourcing of millions of dollars in bargaining unit work.

California is one of the only states that protect striking workers from losing health coverage. The state legislature passed a law in 2021 that blocks the tactic from being used against public employees and another law in 2022 that allows any striking workers who lose their insurance to immediately get heavily discounted coverage through the state's Affordable Care Act marketplace.

If they remain locked out, the NEA workers would be eligible for coverage under COBRA, a federal program that allows people who are fired or laid off to maintain their employer-sponsored insurance for 18 months.

But the coverage can be a financial hardship, as individuals often must pay the entire cost of their insurance premiums, plus a 2% administrative fee.

Another option for workers would be coverage through the Affordable Care Act marketplace, though that also could be costly. And it may be unclear how soon that coverage would begin or whether insurers would cover their existing doctors.

“I'm hoping the NEA will be so ashamed of what they are doing that, at the very least, they will not take away our health benefits,” Barksdale said.

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By: Phil Galewitz, KFF Health News
Title: Union With Labor Dispute of Its Own Threatens to Cut Off Workers' Health Benefits
Sourced From: kffhealthnews.org/news/article/nea-national-education-association-union-threatens-health-insurance-benefit-lockout/
Published Date: Fri, 26 Jul 2024 09:00:00 +0000

Did you miss our previous article…
https://www.galvestontrendingnews.com/kaiser-health-news/the-cdcs-test-for-bird-flu-works-but-it-has-issues/