Why Many Nonprofit (Wink, Wink) Hospitals Are Rolling in Money
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One owns a for-profit insurer, a venture capital company, and for-profit hospitals in Italy and Kazakhstan; it has just acquired its fourth for-profit hospital in Ireland. Another owns one of the largest for-profit hospitals in London, is partnering to build a massive training facility for a professional basketball team, and has launched and financed 80 for-profit start-ups. Another partners with a wellness spa where rooms cost $4,000 a night and co-invests with “leading private equity firms.”
Do these sound like charities?
These diversified businesses are, in fact, some of the country’s largest nonprofit hospital systems. And they have somehow managed to keep myriad for-profit enterprises under their nonprofit umbrella — a status that means they pay little or no taxes, float bonds at preferred rates, and gain numerous other financial advantages.
Through legal maneuvering, regulatory neglect, and a large dollop of lobbying, they have remained tax-exempt charities, classified as 501(c)(3)s.
“Hospitals are some of the biggest businesses in the U.S. — nonprofit in name only,” said Martin Gaynor, an economics and public policy professor at Carnegie Mellon University. “They realized they could own for-profit businesses and keep their not-for-profit status. So the parking lot is for-profit; the laundry service is for-profit; they open up for-profit entities in other countries that are expressly for making money. Great work if you can get it.”
Many universities’ most robust income streams come from their technically nonprofit hospitals. At Stanford University, 62% of operating revenue in fiscal 2023 was from health services; at the University of Chicago, patient services brought in 49% of operating revenue in fiscal 2022.
To be sure, many hospitals’ major source of income is still likely to be pricey patient care. Because they are nonprofit and therefore, by definition, can’t show that thing called “profit,” excess earnings are called “operating surpluses.” Meanwhile, some nonprofit hospitals, particularly in rural areas and inner cities, struggle to stay afloat because they depend heavily on lower payments from Medicaid and Medicare and have no alternative income streams.
But investments are making “a bigger and bigger difference” in the bottom line of many big systems, said Ge Bai, a professor of health care accounting at the Johns Hopkins University Bloomberg School of Public Health. Investment income helped Cleveland Clinic overcome the deficit incurred during the pandemic.
When many U.S. hospitals were founded over the past two centuries, mostly by religious groups, they were accorded nonprofit status for doling out free care during an era in which fewer people had insurance and bills were modest. The institutions operated on razor-thin margins. But as more Americans gained insurance and medical treatments became more effective — and more expensive — there was money to be made.
Not-for-profit hospitals merged with one another, pursuing economies of scale, like joint purchasing of linens and surgical supplies. Then, in this century, they also began acquiring parts of the health care systems that had long been for-profit, such as doctors’ groups, as well as imaging and surgery centers. That raised some legal eyebrows — how could a nonprofit simply acquire a for-profit? — but regulators and the IRS let it ride.
And in recent years, partnerships with, and ownership of, profit-making ventures have strayed further and further afield from the purported charitable health care mission in their community.
“When I first encountered it, I was dumbfounded — I said, ‘This not charitable,’” said Michael West, an attorney and senior vice president of the New York Council of Nonprofits. “I’ve long questioned why these institutions get away with it. I just don’t see how it’s compliant with the IRS tax code.” West also pointed out that they don’t act like charities: “I mean, everyone knows someone with an outstanding $15,000 bill they can’t pay.”
Hospitals get their tax breaks for providing “charity care and community benefit.” But how much charity care is enough and, more important, what sort of activities count as “community benefit” and how to value them? IRS guidance released this year remains fuzzy on the issue.
Academics who study the subject have consistently found the value of many hospitals’ good work pales in comparison with the value of their tax breaks. Studies have shown that generally nonprofit and for-profit hospitals spend about the same portion of their expenses on the charity care component.
Here are some things listed as “community benefit” on hospital systems’ 990 tax forms: creating jobs; building energy-efficient facilities; hiring minority- or women-owned contractors; upgrading parks with lighting and comfortable seating; creating healing gardens and spas for patients.
All good works, to be sure, but health care?
What’s more, to justify engaging in for-profit business while maintaining their not-for-profit status, hospitals must connect the business revenue to that mission. Otherwise, they pay an unrelated business income tax.
“Their CEOs — many from the corporate world — spout drivel and turn somersaults to make the case,” said Lawton Burns, a management professor at the University of Pennsylvania’s Wharton School. “They do a lot of profitable stuff — they’re very clever and entrepreneurial.”
The truth is that a number of not-for-profit hospitals have become wealthy diversified business organizations. The most visible manifestation of that is outsize executive compensation at many of the country’s big health systems. Seven of the 10 most highly paid nonprofit CEOs in the United States run hospitals and are paid millions, sometimes tens of millions, of dollars annually. The CEOs of the Gates and Ford foundations make far less, just a bit over $1 million.
When challenged about the generous pay packages — as they often are — hospitals respond that running a hospital is a complicated business, that pharmaceutical and insurance execs make much more. Also, board compensation committees determine the payout, considering salaries at comparable institutions as well as the hospital’s financial performance.
One obvious reason for the regulatory tolerance is that hospital systems are major employers — the largest in many states (including Massachusetts, Pennsylvania, Minnesota, Arizona, and Delaware). They are big-time lobbying forces and major donors in Washington and in state capitals.
But some patients have had enough: In a suit brought by a local school board, a judge last year declared that four Pennsylvania hospitals in the Tower Health system had to pay property taxes because its executive pay was “eye popping” and it demonstrated “profit motives through actions such as charging management fees from its hospitals.”
A 2020 Government Accountability Office report chided the IRS for its lack of vigilance in reviewing nonprofit hospitals’ community benefit and recommended ways to “improve IRS oversight.” A follow-up GAO report to Congress in 2023 said, “IRS officials told us that the agency had not revoked a hospital’s tax-exempt status for failing to provide sufficient community benefits in the previous 10 years” and recommended that Congress lay out more specific standards. The IRS declined to comment for this column.
Attorneys general, who regulate charity at the state level, could also get involved. But, in practice, “there is zero accountability,” West said. “Most nonprofits live in fear of the AG. Not hospitals.”
Today’s big hospital systems do miraculous, lifesaving stuff. But they are not channeling Mother Teresa. Maybe it’s time to end the community benefit charade for those that exploit it, and have these big businesses pay at least some tax. Communities could then use those dollars in ways that directly benefit residents’ health.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
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Fix Chronic Fatigue & Regain Your Energy, By Science
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Chronic fatigue is on the rise. A lot of it appears to be Long COVID-related, but whether that’s the case for you or not, one thing that will make a big difference to your energy levels is something that French biochemist Jessie Inchauspé is here to explain:
Mitochondrial management
Inchauspé explains it in terms of a steam train; to keep running, it must have coal burning in its furnace. However, if more coal is delivered to the engine room faster than it can be put in the furnace and burned, and the coal just keeps on coming, the worker there will soon be overwhelmed trying to find places to put it all; the engine room will be full of coal, and the furnace will sputter and go out because the worker can’t even reach it on account of being buried in coal.
So it is with our glucose metabolism also. If we get spikes of glucose faster than our body can deal with them, it will overload the body’s ability to process that energy at all. Just like the steam train worker, our body will try! It’ll stuff that extra glucose wherever it can (storing as glycogen in the liver is a readily available option that’s easy to do and/but also gives you non-alcoholic fatty liver disease and isn’t quickly broken down into useable energy), and meanwhile, your actual mitochondria aren’t getting what they need (which is: a reliable, but gentle, influx of glucose).
You can imagine that the situation we described in the steam train isn’t good for the engine’s longevity, and the corresponding situation in the human body isn’t good for our mitochondria either (or our pancreas, or our liver, or… the list goes on). Indeed, damaged mitochondria affect exercise capacity and stress resilience—as well as being a long-term driver of cancer.
The remedy, of course, is blood sugar management. Specifically, avoiding glucose spikes. She has a list of 10 ways to do this (small changes to how we eat; what things to eat with what, in which order, etc) that make a huge measurable difference. For your convenience, we’ve linked those ten ways below; first though, if you’d like to hear it from Inchauspé directly (her style is very pleasant), enjoy:
Click Here If The Embedded Video Doesn’t Load Automatically!
Want to learn more?
You might also like to read:
- 10 Ways To Balance Your Blood Sugars ← this is the longer list she’s referring to in the video!
- How To Unfatty A Fatty Liver ← also relevant
Take care!
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Elderly loss of energy
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It’s Q&A Day at 10almonds!
Have a question or a request? You can always hit “reply” to any of our emails, or use the feedback widget at the bottom!
In cases where we’ve already covered something, we might link to what we wrote before, but will always be happy to revisit any of our topics again in the future too—there’s always more to say!
As ever: if the question/request can be answered briefly, we’ll do it here in our Q&A Thursday edition. If not, we’ll make a main feature of it shortly afterwards!
So, no question/request too big or small
❝Please please give some information on elderly loss of energy and how it can be corrected. Please!❞
A lot of that is the metabolic slump described above! While we certainly wouldn’t describe 60 as elderly, and the health impacts from those changes at 45–55 get a gentler curve from 60 onwards… that curve is only going in one direction if we don’t take exceptionally good care of ourselves.
And of course, there’s also a degree of genetic lottery, and external factors we can’t entirely control (e.g. injuries etc).
One factor that gets overlooked a lot, though, is really easy to fix: B-vitamins.
In particular, vitamins B1, B5, B6, and B12. Of those, especially vitamins B1 and B12.
(Vitamins B5 and B6 are critical to health too, but relatively few people are deficient in those, while many are deficient in B1 and/or B12, especially as we get older)
Without going so detailed as to make this a main feature: these vitamins are essential for energy conversion from food, and they will make a big big difference.
You might especially want to consider taking sulbutiamine, which is a synthetic version of thiamin (vitamin B1), and instead of being water-soluble, it’s fat-soluble, and it easily crosses the blood-brain barrier, which is a big deal.
As ever, always check with your doctor because your needs/risks may be different. Also, there can be a lot of reasons for fatigue and you wouldn’t want to overlook something important.
You might also want to check out yesterday’s sponsor, as they offer personalized at-home health testing to check exactly this sort of thing.
❝What are natural ways to lose weight after 60? Taking into account bad knees or ankles, walking may be out as an exercise, running certainly is.❞
Losing weight is generally something that comes more from the kitchen than the gym, as most forms of exercise (except HIIT; see below) cause the metabolism to slow afterwards to compensate.
However, exercise is still very important, and swimming is a fine option if that’s available to you.
A word to the wise: people will often say “gentle activities, like tai chi or yoga”, and… These things are not the same.
Tai chi and yoga both focus on stability and suppleness, which are great, but:
- Yoga is based around mostly static self-support, often on the floor
- Tai chi will have you very often putting most of your weight on one slowly-increasingly bent knee at a time, and if you have bad knees, we’ll bet you winced while reading that.
So, maybe skip tai chi, or at least keep it to standing meditations and the like, not dynamic routines. Qigong, the same breathing exercises used in tai chi, is also an excellent way to improve your metabolism, by the way.
Ok, back onto HIIT:
You might like our previous article: How To Do HIIT* (Without Wrecking Your Body)
*High-Intensity Interval Training (the article also explains what this is and why you want to do it)
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Egg Whites vs Whole Eggs – Which is Healthier?
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Our Verdict
When comparing egg whites to whole eggs, we picked the whole eggs.
Why?
Egg whites are mostly protein. Egg yolks are mostly fat, with some protein.
However, fat ≠ bad, and the yolk is also where the choline is stored, which itself (as well as its benefits for your brain) will tend to reduce fat storage in the body.
Furthermore, the yolk contains an assortment of vitamins, minerals, and essential amino acids. After all, the yolk is there specifically to contain everything needed to turn a cluster of cells into a small bird.
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Doctors From 15 Specialties Tell The Worst Common Mistakes People Make
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Whatever your professional background, you probably know many things about it that are very obvious to you, but that most people don’t know. So it is for doctors too; here are the things that doctors from 15 specialties would never do, and thus advise people against doing:
Better safe than sorry
We’ll leap straight into it:
- General Surgery: avoid rushing into musculoskeletal or spinal surgery unless absolutely necessary; conservative treatments like physical therapy are often effective.
- Interventional Gastroenterology: avoid long-term, around-the-clock use of anti-inflammatory pain medications (e.g. Ibuprofen and friends) to prevent stomach ulcers.
- Podiatry: never place feet on the car dashboard due to the risk of severe injuries from airbag deployment.
- Rheumatology: avoid daily use of high heels to prevent joint and foot deformities, bunions, and pain.
- Otorhinolaryngology: never smoke, as it can lead to severe consequences like laryngectomy and other life-altering conditions.
- Pediatrics: avoid dangerous activities for children, such as swimming alone, eating choking hazards, biking or skiing without a helmet, or consuming raw meat/fish/dairy. Also, be cautious with firearms in homes.
- Orthopedic Surgery: avoid riding motorcycles and handling fireworks due to high risks of accidents.
- Emergency Medicine: never drink and drive or ride ATVs. Always use eye protection during activities like woodworking.
- Ophthalmology: always wear safety glasses during activities like grinding metal or woodworking. Sunglasses are essential to prevent UV damage even on cloudy days.
- Urology: avoid shaving pubic hair if diabetic or immunocompromised to prevent severe infections like Fournier’s gangrene.
- Gastroenterology: do not use gut health supplements as they lack proven efficacy and are often a waste of money*
- Plastic Surgery: avoid contour threads (barbed sutures for facial rejuvenation) and butt implants due to risks like infection, complications, and poor outcomes.
- Psychiatry: never take recreational drugs from unknown sources to avoid accidental overdoses, especially from substances laced with fentanyl. Carry Narcan for emergencies.
- Dermatology: use sunscreen daily to prevent skin cancer, aging, pigmentation issues, and texture problems caused by UV exposure.
- Cardiology: avoid the carnivore diet as it increases heart disease risks due to its negligible fiber content and high saturated fat intake.
*We had an article about this a while back; part of the problem is that taking probiotics without prebiotics can mean your new bacteria just die in about 20 minutes, which is their approximate lifespan in which to multiply or else die out. Similar problems arise if taking them with sugar that feeds their competitors instead. See: Stop Sabotaging Your Gut!
For more on each of these, in the words of the respective doctors, enjoy:
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Want to learn more?
You might also like to read:
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7 Minutes, 30 Days, Honest Review: How Does The 7-Minute Workout Stack Up?
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For those who don’t like exercising, “the 7-minute workout” (developed by exercise scientists Chris Jordan and Bret Klika) has a lot of allure. After all, it’s just 7 minutes and then you’re done! But how well does it stand up, outside of the lab?
Down-to-Earth
Business Insider’s Kelly Reilly is not a health guru, and here he reviews the workout for us, so that we can get a real view of what it’s really like in the real world. What does he want us to know?
- It’s basically an optimized kind of circuit training, and can be done with no equipment aside from a floor, a wall, and a chair
- It’s one exercise for 30 seconds, then 10 seconds rest, then onto the next exercise
- He found it a lot easier to find the motivation to do this, than go to the gym. After all “it’s just 7 minutes” is less offputting than getting in the car, driving someplace, using public facilities, driving back, etc. Instead, it’s just him in the comfort of his home
- The exercise did make him sweat and felt like a “real” workout in that regard
- He didn’t like missing out on training his biceps, though, since there are no pulling movements
- He lost a little weight over the course of the month, though that wasn’t his main goal (and indeed, he was not eating healthily)
- He did feel better each day after working out, and at the end of the month, he enjoyed feeling self-confident in a tux that now fitted him better than it did before
For more details, his own words, and down-to-earth visuals of what this looked like for him, enjoy:
Click Here If The Embedded Video Doesn’t Load Automatically!
Further reading
Want to know more? Check out…
- How To Do HIIT (Without Wrecking Your Body)
- HIIT, But Make It HIRT ← this is about high-intensity resistance training!
Take care!
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Younger You – by Kara Fitzgerald
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First, a note about the author: she is a naturopathic doctor, a qualification not recognized in most places. Nevertheless, she clearly knows a lot of stuff, and indeed has been the lead research scientist on a couple of studies, one of which was testing the protocol that would later go into this book.
Arguably, there’s a conflict of interest there, but it’s been peer reviewed and the science seems perfectly respectable. After an 8-week interventional trial, subjects enjoyed a reversal of DNA methylation (one of various possible markers of biological aging) comparable to being 3 years younger.
Where the value of this book lies is in optimizing one’s diet in positive fashion. In other words, what to include rather than what to exclude, but the “include” list is quite extensive so you’re probably not going to be reaching for a donut by the time you’ve eaten all that. In particular, she’s optimized the shopping list for ingredients that contain her DNA methylation superstars most abundantly; those nutrients being: betaine choline, curcumin, epigallocatechin gallate, quercetin, rosmarinic acid, and vitamins B9 and B12.
To make this possible, she sets out not just shopping list but also meal plans, and challenges the reader to do an 8-week intervention of our own.
Downside: it is quite exacting if you want to follow it 100%.
Bottom line: this is a very informative, science-based book. It can make you biologically younger at least by DNA methylation standards, if the rather specific diet isn’t too onerous for you.
Click here to check out Younger You, and enjoy a younger you!
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