hospital impact

by Nick Jacobs

Senator Chuck Grassley (R) Iowa while still the chairman of the Committee on Finance, directed his staff last September to create a discussion draft of potential reforms to ensure adequate levels of charitable care from the nation's non-profit hospitals. His desire to pursue this topic was rooted in his belief made by interpretive assertions by IRS Commissioner Mark Everson and the Government Accountability Office that there is little difference between for-profit and non-profit hospitals when it comes to charity care and community benefits provided. As stated by Grassley, the staff draft of potential ideas was the beginning of a discussion, not the end. Public comments are strongly encouraged at this point. Public comment should be sent to hospital_comments@finance-rep.senate.gov by Friday August 24, 2007.

The above paragraph is the premise for this post and my submission to Senator Grassley for public comment.

Let me begin by saying that I have no personal ax to grind with the for profit world. Having stated that, however, unless you live the day to day challenges of survival in the non profit health care arena, your viewpoints cannot possibly include every aspect of the decision making process necessary to keep it all together.

Having previously worked with a half dozen former executives from the for profit health care sector, it seems to me that the current governmental leadership has missed some very important points.

As an employee of the former for profit leaders, it was perfectly clear that, at least the motivation of those individuals for whom I had worked was directed toward their salaries, bonuses, and, as they stated it to me, a solid commitment toward making money for their stockholders. How do you measure the nuances created in a system that has a profit motivation leading to the creation of wealth for owners as compared to a system that exists only to create the common good?

Their typical description of their functioning as a for profit vs a not for profit CEO was that, if the neonatal, OB, trauma or psych units were not profitable, you would be strongly encouraged to close them down. Public good vs stockholder's shares become the measure of success.

What is this about? For any government official to paint a picture depicting that the non profit motivation is the same as that of the for profits, it is clear that he is living in only the numbers that are obvious to him, not in the realities of the mission and challenges present in vast majority of small and medium sized, hospitals just struggling to stay alive.