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Non-Profit Hospitals Rip-Off America

Over 80% of hospitals in the U.S. are non-profit. Nonprofit hospitals do not pay federal income or state and local property taxes. Researchers at Yale, University of Pennsylvania, Carnegie Mellon and the London School of Economics found nonprofits don’t price any less aggressively than for-profits.

Study co-author Zack Cooper of Yale wrote: “We subsidize not-for-profits to the tune of $30 billion annually, in the form of tax exemptions.

According to The New York Times, one of largest nonprofit hospital chains, Providence, paid $45 million to consultants from McKinsey to develop the "Rev-Up" program designed to maximize revenue by denying poor patients charity care that they're entitled to under federal law. The program bullied hospital employees into becoming bullies themselves, directing them to threaten patients with debt collection companies and bad credit.

The federal Consumer Financial Protection Bureau (CFPB) reported that 58% of all consumer debt is medical debt. That's an amazing $88 billion.

The L.A. Times discovered one example of price-gouging. A hospital in Southern California performed a real-time price markup of 675%. The article said the rapacious price increases are stunningly "routine," and that hospital software actually includes the "formula" for price hikes.

Seven of the 10 most profitable hospitals in the United States in 2013 – each earning more than $163 million in profits from patient care services – were nonprofit hospitals, according to the research from the Johns Hopkins Bloomberg School of Public Health and Washington and Lee University.

Gerard F. Anderson, PhD, a professor in the Department of Health Policy and Management at the Bloomberg School. believes that the most profitable hospitals have monopolies, or near monopolies, in their communities. This allows these hospitals to charge very high rates to private insurers.

Non-profit hospitals are doubling down on monopolistic practices buy buying both non-profit and for-profit hospitals. Activity by not-for-profit health systems as both acquirer and seller increased as a percentage of total transactions in 2021. Combined, transactions involving a not-for-profit partner represented 87% of announced transactions, compared with 81% in 2020.

To keep the money flowing their way, last year the American Hospital Association, historically one of the top five spenders in Washington, paid $24 million to lobby Congress. Over the last 10 years, the AHA has spent almost $400 million on lobbying, according to the Center for Responsive Politics.

Even when congress passes laws to help medical consumers by mandating price transparency, these hospitals simply disregard the law. Since January 2021, hospitals have been required by law to publicly post their formerly secret prices. Fewer than 20% of all nonprofit hospitals are complying with the law and disclosing their prices.

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