NYT article on How Big "Non Profit Hospitals" Refuse to Disclose
Let's say you garnered a Masters in Business from a name university. For a while you cool your heels while occupying a VP position for a large insurance company. One day, you realize you are in a position to handle some exciting career building "quid pro quo" - you let the local hospital people know that you will see to it that there is a contract that will go into effect, locking your insurance company and its employees into the local hospital for the employees' health needs.
Not surprisingly, just six months later, you are asked to become a member of the board of directors of that hospital. Such is your reward for your MBA, for your utilizing your position at an insurance company to its best advantage, etc.
Now you have some power. You can see to it that you utilize your position at this hospital to help the other board members strip away the community control aspects of that hospital. Other exciting projects come up -as America enters the era of digital hospital records, you can help persuade the community that some $ 300K needs to be assessed to the local community for the purpose of having some software engineers be paid to develop the software. Never mind that by now the hospital is part of a franchise such as Sutter Hospital, and that the money will be able to be pocketed by someone (maybe yourself and the other board members?) as the franchise itself already has the software and no one anywhere needs to develop it!
Such are the concerns us mere mortals need to have with regards to the "non profit hospitals" in our midst. recently an article in the New York Times points out other aspects of Big Hospitals that might need to have some oversight.
Here is the link to the NYT article:
http://economix.blogs.nytimes.com/2013/04/12/the-governance-of-nonprofit-hospitals/
Author: UWE E. REINHARDT
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
From the article:
For the most part, however, these boards are self-perpetuating; the board members elect successors whenever there are vacancies. Belying their label, nonprofit entities can, in fact, be heavily profit-oriented and can earn sizable profits, which they delicately call “revenues in excess of expenses” or “available for future services.” Unlike profit-making entities, they cannot distribute these profits to any owners. Instead, they plow them back into investments in plant and equipment
or add them to endowments. (My comment - how very profitable for any board member whose relative(s) happen to be brokers of financial commodities!)
By law, nonprofit entities must submit fairly detailed financial reports to the Internal
Revenue Service on a Form 990, which has been refined as part of the Affordable Care Act.
Form 990 offers considerable detail on a nonprofit’s finances and operations, although nowhere near as much detail as is routinely reported to the S.E.C. by profit-making entities.
But try to find Form 990 on the Web site of most nonprofits. I can predict with almost certainty that you will not find it there.
More at the above link.
