Tag Archives: nonprofit hospitals

Brill reminds New York AHCJ members to follow the money

Liz Seegert

About Liz Seegert

Liz Seegert (@lseegert), is AHCJ’s topic editor on aging. Her work has appeared in Kaiser Health News, The Atlantic.com, New America Media, AARP.com, Practical Diabetology, Home Care Technology report and on HealthStyles Radio (WBAI-FM, NYC). She is a senior fellow at the Center for Health, Media & Policy at Hunter College, NYC, and a co-produces HealthStyles for WBAI-FM/Pacifica Radio.

AHCJ New York members gained a unique look this week into how journalist, author, and businessman Steven Brill researched and compiled his now-infamous 36-page Time Magazine articleBitter Pill: Why Medical Bills Are Killing Us.” The article took a hard look at the costs of hospital care in the United States – from the $70 box of gauze pads to a $50,000 up-front payment demand by one top cancer facility before doctors there would even evaluate a terminally ill patient.

That March 4 opus added fuel to an already contentious debate about the skyrocketing cost of U.S. health care. Brill emphasized the huge price discrepancies between what it costs hospitals and what they charge Medicare, private insurers, and direct-billed patients for identical care. “It was really a question of just doing some math,” he said.

Brill detailed his efforts to get satisfactory explanations from hospital CEOs about their multimillion dollar salaries while someone who had no health insurance was paying perhaps hundreds of dollars for a product that could be purchased in a local drugstore for pocket change.  He explained how he obtained copies of actual hospital bills – for hundreds of thousand of dollars in some cases – and how he tracked down and analyzed the price differentials charged to public, private and non-insured patients. Continue reading

Public hospitals, not nonprofits, shoulder burden of charity care

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

Writing in the Contra Costa Times, Sandy Kleffman reports that while nonprofit hospitals in the East Bay are given millions in tax breaks, “The responsibility of caring for the indigent falls largely on the region’s public hospitals.”

Kleffman’s findings are based on her analysis of publicly available California Office of Statewide Health Planning and Development reports, documents which she learned to access and process at a September webinar led by AHCJ board president and ProPublica senior reporter Charles Ornstein.

Her analysis revealed a substantial imbalance in the numbers, especially between public hospitals and nonprofits. For example, Contra Costa’s county hospital provided more than three quarters of the total amount of charity care given in the country in 2010, while the six nonprofits together accounted for just under 23 percent.

For their part, representatives of nonprofit hospitals protested that the numbers do not take into account the other community benefits they provide, nor are they adjusted to compensate for the differences in demographics across each institution’s patient pool.

For more on what went into Kleffman’s report, see her sidebar on “How we made comparisons.”

Cash-strapped Ill. goes after hospitals’ nonprofit status

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

A New York Times article written by Bruce Japsen, an independent journalist writing for the Chicago News Co-Op, digs into Illinois’ recent challenges to the tax exemptions granted to a trio of prominent hospitals by virtue of their nonprofit status. The challenge, inspired in part by the state supreme court’s willingness to uphold the revocation of the nonprofit status of an Catholic hospital in Urbana last year, could expand to more than a dozen other institutions as the state scrambles to cover a looming revenue shortfall.

In its case, the state alleges that the hospitals aren’t providing a high enough proportion of charity care to fulfill the mission of a nonprofit.

All three of the hospitals the state is focusing on provided free and discounted medical care that ranged from 0.96 percent to 1.85 percent of patient-care revenue, according to the revenue department. The state also said that each one had been operating as a “for profit” business when the state’s Constitution says that “only charities are entitled to a tax exemption.”

The hospitals, for their part, point to the other benefits they provide the community, such as neonatal intensive care and burn units, that don’t always bolster their bottom lines. Advocates answer that paying taxes provides a community benefit as well, one that can readily be measured in dollars and cents. And Japsen found that paying those taxes doesn’t even seem to preclude the provision of charity care, especially at the parsimonious levels provided by the hospitals currently targeted by the state.

“The relative amounts of charity care provided by not-for-profit tax-exempts are not materially different from the amount provided by for-profit hospitals,” said Jim Unland, a longtime analyst of Illinois’ health care industry and president of the Health Capital Group, a consulting firm in Chicago. “This raises the issue of whether the tax-exempts are getting prejudicially favorable treatment.”

The three hospitals whose tax exemptions have been stripped by the state department of revenue plan to challenge the action in court, and state hospital organizations are gearing up for a lobbying push they hope will put their tax status on firmer ground.

Uninsured face delays, increased risks en route to long-term care

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

Writing for Heart & Soul, Yanick Rice Lamb offers up a comprehensive take on the special challenges patients and hospitals face when it comes to long-term care for the uninsured.

… a growing number of uninsured people … need long-term care after hospital stays. They lack insurance because they can’t afford it, their employers don’t offer it or they were dropped by private carriers after taking out policies on their own. Consequently, these patients experience delays in moving on to the next step in their care once they are medically ready for discharge. They are stuck in the hospital, because it’s hard to place patients in long-term care facilities or send them home with a nurse when they have no coverage, especially when there are complications. Hospitals end up picking up the tab — sometimes even after patients leave. Those costs are ultimately passed on to everyone who pays taxes and anyone who has a medical bill.

Rice Lamb fleshes out this scenario not only with anecdotes, but with a raft of statistics and studies showing that the ranks of such patients are swelling rapidly, as is the financial toll they’re taking on the system. She ties it in with the hospital “frequent flyer” and charity care issues that have received so much ink in recent years. At the same time, she takes a deeper look at the issues faced by the patients themselves, from the difficulty of spending days and weeks away from family, to the lower levels of attention they may receive from hospital staff as their stays drag on, to the increased risk of hospital-acquired infections and lack of specialized rehab.

Some of the most surprising observations came in relation to undocumented immigrants, who present major challenges despite being a small part of the patient population.

In some cases, when community support can’t be found, Rice Lamb writes that hospitals “Often pay to transport immigrants back to their countries — if the patients agree — and sometimes cover medical bills in their homelands. This often costs less than absorbing the expense of continuous care in the United States.”

Furthermore, she says, “Even with U.S. citizenship, language barriers can contribute to discharge delays. When caregivers spoke little English, the length of stay increased to 6.1 days, compared to four days for the control group, according to a study published recently in the Archives of Pediatrics & Adolescent Medicine.”

Throughout her work, Rice Lamb takes advantage of sources which reporters around the country should find useful when localizing similar topics.

Rice Lamb completed this project while on an AHCJ Media Fellowship on Health Performance, supported by the Commonwealth Fund.

Reporter digs into nonprofit hospital CEO pay

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

At The Atlanta Journal-Constitution‘s M.B. Pell has assembled a look at CEO pay at local nonprofit hospitals. Pell hits hard at the top of the story, pointing out that top executives are pulling in ever-growing six- and seven-digit salaries in a time of cutbacks and job losses, and demonstrating that the state loses millions in tax revenue thanks to the hospitals’ exempt status.

It’s the sort of meaty accountability work that we expect to see on a tax filing-based story. Slightly more surprising? Pell endeavored to complete the picture with a healthy dose of perspective, reminding readers that in urban areas like Atlanta, even nonprofit hospitals are often complicated billion-dollar conglomerates. In Georgia, Pell writes, “hospitals report to 27 state and federal agencies and engage in multimillion-dollar building projects. The larger hospital systems have billions in revenue and are among the largest employers in their communities. Many also operate for-profit subsidiaries.” Those “billions” provide valuable context when discussing a $600,000 pay package.

Hospital executives and industry experts consider the examination of salaries a titillating issue for the public, but a subject lacking in substance.

Even if salaries were cut dramatically, the savings would not add significantly to hospitals’ charitable missions, Parker said.

Tax exempt hospitals in the metro area provided $932 million in charitable care in 2009, according to an analysis of financial survey data reported to the state by hospitals. The hospitals spent $61 million to pay officers, directors, trustees and key employees, tax forms show.

Of the uncompensated care, nearly a third, or $287.5 million, was provided by one hospital, Grady Memorial. Grady CEO Michael Young, who left the hospital in June, made $833,646 in 2009.

But for-profit hospitals in the Atlanta area pay taxes and they provided uncompensated care totaling $87 million in 2009, according to financial survey data.

For a counterpoint, Pell turned to a few outspoken patient advocates and a 2009 study conducted by University of Connecticut researchers. It’s another data point that demonstrates the depth of Pell’s research.

CEOs of nonprofit hospitals in Connecticut who increased the number of beds at their facilities by 10 percent typically got pay increases of just under 8 percent, shows a study of nonprofit hospitals by two professors at the University of Connecticut.

A 10 percent increase in the amount of charity care provided, however, typically resulted in a 1.5 percent decrease in the CEO’s pay, the study shows.

Pell’s story takes the national picture into account, but if you’re just looking to get up to speed on the national debate over nonprofit hospitals, charity care and tax exemption as it relates to executive pay, I recommend you scroll down to the final subhead: “Eyeing tax exemption.”

Wash. hospital executive salaries may threaten nonprofit status

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

KUOW’s John Ryan, who has been using public records to investigate pay for nonprofit hospital executives, dove deeper into the series when he discovered a law on the state’s books that appears to limit the pay of nonprofit execs to something near that paid to equivalent employees in the public sector. On the face of it, it appears many execs aren’t satisfying this requirement, which may place their hospitals’ tax breaks in jeopardy.

KUOW has learned that 15 hospital executives in Washington made $1 million or more in 2009. That elite group includes 14 nonprofit executives and one head of a government hospital.

For their part, hospital spokespeople pointed out that there may be no equivalent in Washington’s public sector to the work they do, and that some state hospital executives do pretty well for themselves anyway. Those claims haven’t stopped legislators from taking action based on Ryan’s work.

After learning of KUOW’s findings, state senators Cheryl Pflug and Karen Keiser co-sponsored a bill that would require nonprofit hospitals to publish their top executives’ incomes each year. They’d also have to provide proof to tax collectors that the paychecks aren’t out of line with comparable pay in the public sector.

If you’re looking to re-create Ryan’s work in your neck of the woods, he’s written a nifty little “How I did it” that should get you started, although he tells Covering Health that Washington’s law requiring nonprofit executive pay to be comparable to public-sector pay might be unique. But for looking into all kinds of executive compensation stories, AHCJ members should refer to tip sheets such as:

Nonprofit hospitals pay country club dues for execs

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

In what would seem a logical follow up to last year’s piece on hospital salaries, KUOW’s John Ryan has used public records to look at the top salaries at Seattle-area nonprofits this year.

This time, he focuses on the job perks given to nonprofit executives as much as he does their paychecks. Among them, Ryan writes, “Eight hospital systems in our region reported paying membership dues for their executives at clubs like the Columbia Tower Club and the Kitsap Golf and Country Club.”

A PDF of the salaries is also available. For more on how Ryan puts it all together, see the how-to he posted with last year’s edition.

Tax documents show CEO pay exceeds charity care at some Calif. nonprofit hospitals

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

Ron Shinkman, editor of the trade newsletter Payers & Providers, spent four months reviewing tax documents filed by 120 nonprofit California hospitals in 2007 and 2008. He found that base CEO compensation was somewhere around $517,123 in that period, which is more than double national numbers from a survey published in 2001.

To add perspective to the numbers, California Watch’s Christina Jewett looked at Shinkman’s research – especially the sentence that mentioned “11 hospital executives whose compensation exceeded the cost of the charity care provided by their hospitals during the reporting year” – and evaluated it in terms of the national debate over the amount of charity care provided by nonprofit hospitals.

Shinkman is charging for full copies of his work and the resulting white paper, but between Jewett’s coverage and the brief version Shinkman has posted, readers should be able to get a pretty good idea of where the story is going and, perhaps more importantly, how to report on CEO pay at your local nonprofit hospitals.

For more help covering nonprofit hospitals:

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Course teaches how to report on hospital finance

Covering Hospitals online training

This free innovative simulation, “On the Beat: Covering Hospitals,” guides you through the sources and resources you need to tackle the beat.

You’ll tap into the same tools that you’ll use on the job, and you’ll have a virtual mentor to walk you through the maze of reports, statistics and sources. One story line teaches you about how to report on hospital finances.

Start today to hone your critical-thinking skills and gain the beat-specific knowledge needed to cover the hospitals in your community.

This online training module combines the reporting expertise of AHCJ with NewsU’s innovative e-learning experience and is made possible through a grant from the John S. and James L. Knight Foundation.

New IRS rules reveal hospital conflict disclosures

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

The new IRS disclosure rules for nonprofit hospitals seemed to promise some interesting revelations, and now that they’re public, the Pittsburgh Tribune-Review‘s Walter Roche has taken full advantage of the new disclosures. Roche checked out fiscal 2009 filings from the nonprofit hospitals in his area and found a big handful of conflicts ($10 million at one firm alone), all of which the nonprofits say are entirely above board.

Jennifer Chandler of the National Association of Nonprofits said it is not unusual or improper for nonprofits to have business dealings with board members as long as IRS disclosure requirements are followed.

“It has to be managed correctly,” she said.

The meat of Roche’s story is made up of a laundry list of disclosed conflicts, which include commercial dealings with board members and relatives.

When quality matters to boards, hospitals do better

Andrew Van Dam

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism, and he has blogged for Covering Health ever since.

In Health Affairs, Ashish K. Jha and Arnold M. Epstein have released a study in which they found a link between hospital boards that focused on quality of care and hospital quality ratings. They also found that quality isn’t a top priority for most hospital boards. The researchers hope their findings will help those who want to improve hospital quality by demonstrating just how much influence a hospital board can have.

Jha and Epstein surveyed 1,000 board chairs from a wide sample of not-for-profit acute-care hospitals in the United States. For quality ratings, they relied on the Hospital Quality Alliance.

Related

AHCJ President Charles Ornstein, whose hospital quality coverage has earned national recognition, recently updated his comprehensive “Road map for covering your local hospital’s quality” tip sheet.

AHCJ article: Making sense of hospital quality reports

Book: Covering the Quality of Health Care: A Resource Guide for Journalists

Slim guide: Covering Hospitals: Using Tools on the Web

Free online training

On the Beat: Covering Hospitals: An innovative simulation guides you through the sources and resources you need to tackle the beat. You’ll tap into the same tools that you’ll use on the job, and you’ll have a virtual mentor to walk you through the maze of reports, statistics and sources. One story line teaches you about reporting on hospital quality

Data

Investigating hospitals: Find stories with ready-to-use Hospital Compare data: AHCJ has made it easier for journalists to compare hospitals in their regions by generating spreadsheet files from the HHS database, allowing members to compare more than a few hospitals at a time, using spreadsheet or database software. AHCJ provides key documentation and explanatory material to help you understand the data possibilities and limits.

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