You can hear the squeals all the way from Raleigh. The free lunchers are throwing tantrums throughout the state. So-called “non-profit” organizations are screaming about reductions in state tax refunds, and the possibility of actually having to collect taxes for services rendered. One of the biggest non-profits in the state are hospitals.Carolinas HealthCare System CEO Michael Tarwater warned Tuesday that state legislative proposals to tax hospitals and decrease reimbursement could “disrupt the delicate balance that exists between mission and margin.”
“It’s still pretty gloomy,” Tarwater told board members at their quarterly meeting.
Tarwater, who leads the region’s largest hospital system with $7 billion in revenues and about 40 hospitals across the Carolinas, said he and his staff are monitoring state and federal legislative proposals. Some of them “would have a very negative impact on what we are able to do for our patients,” he said.
For example, under a bill co-sponsored by N.C. State Sen. Bob Rucho (R-Matthews), nonprofit hospitals would be required to pay sales taxes.
State and local governments now pay more than $400 million in annual sales tax refunds to nonprofits, and most of the money goes to hospitals. Under Rucho’s bill, sales tax refunds would be capped at $100,000 per year starting in 2016.We all know what N.C. hospitals’ mission is, and that is to procure outrageous profits. Everyone complains about Big Oil. Hell, they’re pikers compared to Big Hospital. Their profit margins double that of the integrated oil and gas industry.
I have a mission for anyone who’d like to take a challenge. Get a quote from a hospital on the cost of stitching a finger. Now that’s a mission!
And let’s disabuse ourselves that these "non-profit" hospitals are concerned about the general welfare of our citizens. They are just as concerned about profit as any other business, and will use any means to help their bottom line.
For years, the state hospital industry had been accustomed to getting its way in Raleigh. With a squad of lobbyists and generous donations to elected officials, it has long been one of the most powerful interest groups in state politics.
Now it’s facing an array of financial threats, including the rejection of expanded Medicaid funding by the state legislature.
Leaders in both North Carolina and South Carolina chose not to accept Medicaid expansion, which was intended to provide health insurance to more low-income people as part of the Affordable Care Act.
By rejecting the money, North Carolina will deprive state hospitals of $440 million a year, the hospital association estimated.
Tarwater added that cutbacks to hospitals will make it harder for Carolinas HealthCare to give free care to needy patients and to provide other “community benefits.”
The nonprofit system said it provided $284 million in financial assistance and discounts to uninsured patients last year.
And I'm sure they made it up it by overcharging the insured and those who paid cash. But even after the state rejected “free money” from the federal government, Carolinas HealthCare’s financials aren’t hurting. Hell, they’re expanding:
In other business at Tuesday’s quarterly board meeting, Carolinas HealthCare reported first-quarter profits of $160 million, a decrease from $229 million during the same period in 2012. Most of the profit resulted from investment income of $130 million, which was down from $169 million in last year’s first quarter.
The system also reported operating income of $18 million from net operating revenue of $1.9 billion, compared to the first quarter of 2012 when it had $37 million in operating income from $1.6 billion net operating revenue.
Chief Operating Officer Joe Piemont blamed the decrease on “impacts of changes in funding,” such as Medicaid cuts and the loss of county reimbursement for indigent care. “And our costs are not going down.”
Still, Piemont called it “a solid quarter.”
Capital expenditures for the system totaled $185 million in the first quarter. That included the start of construction on a behavioral health center in Davidson and a new rehabilitation center at Carolinas Medical Center-NorthEast in Concord.