Wednesday, May 13, 2009

NY Times Leaves Out Taxing Nonprofit Community Hospitals

The Senate Finance Committee's health reform hearing kicked off with nurse and physician protests. Once clinicians were arrested or escorted from the room, the topic shifted to nonprofit community hospitals and their tax exempt status. Senator Chuck Grassley and Gail Wilensky believe community hospitals should pay taxes, as health reform would eliminate the burden of the uninsured. This topic did not make the NY Times story on the hearing.

Yet, Gail also stressed reducing public expectations and phasing in solutions over a long period. If nonprofit community hospitals lose 501c(3) status and disproportionate share reimbursement early on, how many will fail or have to sell out on the cheap to their for-profit brethren? Many safety net hospitals are already stressed.

How have other insurance requirements worked? Texas has a mandatory auto liability insurance law. 20% of San Angelo drivers have no auto liability coverage, i.e. are not compliant with the law. In Tom Green County roughly 30% of citizens are without health insurance. If 20% of residents have no health coverage post reform, area hospitals still face a substantial care burden.

Why would Chuck Grassley and Gail Wilensky push hard for removal of nonprofit hospital tax-exempt status? They're in the for-profit health care camp. This isn't the first time Chuck pushed the unfair tax advantage button. It seems annually he raises the Federation of American Hospitals' position. FAH is the for-profit hospital lobby. Grassley's campaign received $9,000 from HCA and $5,000 from Triad Hospitals. It's odd, as neither HCA or Triad had hospitals in Iowa.

Gail sits on six boards of directors, garnering $1.2 million in board compensation in 2008 from for-profit health care firms. She holds $20.3 million in stock those firms. In late 2007, she sold stock in two firms for $2.5 million. Wilensky has $24 million of skin in the game. Were these conflicts of interest revealed in public testimony? No.

Guess who doesn't pay taxes? Conservatives for Patient's Rights, the Rick Scott led group trying to block health care reform. It's a nonprofit and cares for nobody. Why should 527 political groups keep nonprofit status, while safety net hospitals pony up to the tax bar? The world's gone flippy floppy and America's leaders are supplying the spin.

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