Trouble with Hospitals and their Poor

By Guest Columnist Feb 27, 2007

The other day one of my friends told me that he was thinking about incorporating his business as a non-profit to avoid paying taxes. The scary thing is, hospitals have been doing this for years—but at the cost of poor communities of color. Take non-profit Catholic Healthcare West–an expansive hospital system in the western United States. The uninsured make up 1.5 percent of their patients but provide 77 percent of their profit. It turns out that the uninsured, of which three out of four are people of color and majority Latino, are billed at much higher rates than those with insurance. Last year, California legislators finally passed measures to curb this disgusting practice after several years of false promises that voluntary guidelines for charity care would do the trick. In Chicago, Advocate hospital’s tax-exempt status has been called into question for racial redlining. The non-profit is one of the largest employers in Chicago with $2.8 billion in annual revenues, $3.6 billion in total assets, and nearly $144 million in profits in 2004. Research by Hospital Accountability Project found that between 1995 and 2003, Advocate spent 800 times more on improvements and expansions into its more profitable hospitals serving whites than its mission-based hospitals serving low-income communities of color. Last year, Illinois hospitals killed legislation advanced by Attorney General Lisa Madigan to require hospitals to spend at least 8 percent of their operating costs annually on charity care. Now, they are "working together" to introduce new legislation-oy vey. This week, a new report by the Northwest Federation of Community Organizations found that for-profit nursing homes in Washington State are doing a better job in serving low-income families than non-profits. Yes, you heard me right: for-profit nursing homes provide care for a much higher share of Medicaid patients and charge individuals without Medicaid $64 less, on average, than non-profit nursing homes. In California non-profit nursing homes helped kill legislation to provide basic overtime and wage protections for domestic workers. Disability advocates helped oppose the bill, because they claimed the costs would be passed onto the elderly and disabled. Why is it okay to subsidize our eroding health care system on the backs of low-income working families of color and immigrants? Maybe they are the ones who should get the tax-exempt status. Perhaps we are being too harsh on nonprofits. Sure they get billions of dollars in tax subsidies with little to no accountability, but, then again, so do multinational corporations and wealthy individuals. After all, if we attempt to better regulate nonprofits maybe they will abandon their missions and become for-profits. Oh wait, that’s already happening.