Unbiased Analysis of Today's Healthcare Issues

Should Non-Profit Hospitals get a Tax Break?

Written By: Jason Shafrin - Mar• 19•06

Of course they should! Non-profit hospitals treat the poorest patients in the most underserved communities using a bare bones administrative budget…right?

According to the New York Times (“Nonprofit Hospitals Face Scrutiny Over Practices“), the traditional view of non-profit hospitals as altruistic institutions may be flawed. The commissioner of internal revenue, Mark W. Everson, said tax officials often found little difference between nonprofit and for-profit hospitals “in their operations, their attention to the benefit of the community or their levels of charity care.” In fact, uninsured patients may pay more for services than the uninsured. For instance, HMOs often negotiate price discounts for their customers who receive services at non-profit hospitals; the uninsured have no one to negotiate on their behalf.

Some excerpts from the article:

  • Some nonprofit hospitals have hired debt collection agencies that “harass the poor.”
  • Some nonprofit hospitals and health systems in Minnesota have provided “lavish gifts” and “grossly excessive” compensation to top executives while providing “paltry levels” of charity care. For instance, the president of NewYork-Presbyterian Hospital, Dr. Herbert Pardes, received more than $4.3 million in compensation in 2004, plus $1.2 million in contributions to his employee benefit plan.

Do you want your tax dollars to help arbitrarily subsidize some hospitals over others? If we want to assist the uninsured, policy should help the poor to afford health insurance, either through easier access to Medicaid or (preferably) monetary transfers to these individuals.

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  1. In the know says:

    The debt collection agencies are totally sleazy. A bunch of people at one local collection agency were toally harassing some of the other employees because they didn’t smoke marijuana. It was full of low-class druggies.

    Those are the types of people who work in these jobs where they harass poor people over medical bills. It is a bunch of bong-smoking idiots.

    This whole industry needs much more regulation. A bunch of law-breaking people who obtain illegal drugs should not be working in jobs where they have access to someone’s health information, and yet that is what some people have seen when they worked in one of those places, a bunch of loud-mouthed drug-using types, because that is the only type of employee some of these sleazy places can manage to keep around.

    Please get involved politically to help tighten up legislation with regards to these sleazy collection agencies.

  2. Anonymous says:

    Here’s some real info on how these so-called “non-profit” hospitals “harass the poor.”


    This is terrible! Not only are there apparently a bunch of skanky, sleazy characters working IN those collection agencies that harass the poor (low class, habitual marijuana users and that type of trash), but some of these agencies and/or their hospital clients are pushing indebted patients into the hands of sleazy predatory lenders, too! Ick! What sleaze in this biz.

  3. Anonymousy says:

    Oh my goodness. Now the medical collections agencies are trying to reivent themselves as offering to help find charity care eligible accounts.

    However, they’re still supplying the predatory lending service if the client wants that.

    Read carefully:


    As long as it is legal for the non-profits to continue to utilize that resource, acting as de facto loan brokers for the financial services industry by steering poor people towards high interest loans to help pay bills they already cannot afford, then shouldn’t these non-profit hospitals just be required to pay their taxes already? I don’t see what’s so charitable about steering sick people to predatory lenders so they end up paying even MORE money. And, of course, these agencies get a nice cut, right? Hmmm. Isn’t that special?

  4. Anonymousy says:


    If you can get this information out to anyone in need of the help, PLEASE spread the word.


    Fight the bastards!

  5. […] Medicare pays extra cash to hospitals for the very sick and very expensive patients they call outliers.  In the St. Barnabas case, the fraud occurred when the hospital chain inflated the bills of these outliers.  For those who say that ‘this is just the thing that happens when hospitals only look at the bottom line’ it is interesting to note that St. Barnabas is listed as a non-profit hospital chain.  I wrote in March questioning the validity of tax breaks for non-profit hospitals and this evidence helps to buttress my argument.  Patrick Burns, an analyst at Taxpayers Against Fraud, stated: “The way the system has operated, it’s almost irresponsible corporate governance for hospitals not to cheat Medicare.” […]

  6. […] one year ago today, I wrote about whether or not non-profit hospitals should be tax exempt (”Should Non-Profit Hospitals get a Tax Break?“). Generally, I concluded that they should […]