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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Rainbow Roasted Potato Salad
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This salad has potatoes in it, but it’s not a potato salad as most people know it. The potatoes are roasted, but in a non-oily-dressing, that nevertheless leaves them with an amazing texture—healthy and delicious; the best of both worlds. And the rest? We’ve got colorful vegetables, we’ve got protein, we’ve got seasonings full of healthy spices, and more.
You will need
- 1½ lbs new potatoes (or any waxy potatoes; sweet potato is also a great option; don’t peel them, whichever you choose) cut into 1″ chunks
- 1 can / 1 cup cooked cannellini beans (or your preferred salad beans)
- 1 carrot, grated
- 2 celery stalks, finely chopped
- 3 spring onions, finely chopped
- ½ small red onion, finely sliced
- 2 tbsp white wine vinegar
- 1 tbsp balsamic vinegar
- 1 tbsp lemon juice
- 1 tbsp nutritional yeast
- 1 tsp garlic powder
- 1 tsp black pepper
- ½ tsp red chili powder
- We didn’t forget salt; it’s just that with the natural sodium content of the potatoes plus the savory flavor-enhancing properties of the nutritional yeast, it’s really not needed here. Add if you feel strongly about it, opting for low-sodium salt, or MSG (which has even less sodium).
- To serve: 1 cup basil pesto (we’ll do a recipe one of these days; meanwhile, store-bought is fine, or you can use the chermoula we made the other day, ignoring the rest of that day’s recipe and just making the chermoula component)
Method
(we suggest you read everything at least once before doing anything)
1) Preheat the oven as hot as it goes!
2) Combine the potatoes, white wine vinegar, nutritional yeast, garlic powder, black pepper, and red chili powder, mixing thoroughly (but gently!) to coat.
3) Spread the potatoes on a baking tray, and roast in the middle of the oven (for best evenness of cooking); because of the small size of the potato chunks, this should only take about 25 minutes (±5mins depending on your oven); it’s good to turn them halfway through, or at least jiggle them if you don’t want to do all that turning.
4) Allow to cool while still on the baking tray (this allows the steam to escape immediately, rather than the steam steaming the other potatoes, as it would if you put them in a bowl).
5) Now put them in a serving bowl, and mix in the beans, vegetables, balsamic vinegar, and lemon juice, mixing thoroughly but gently
6) Add generous lashings of the pesto to serve; it should be gently mixed a little too, so that it’s not all on top.
Enjoy!
Want to learn more?
For those interested in some of the science of what we have going on today:
- White Potato vs Sweet Potato – Which is Healthier?
- Eat More (Of This) For Lower Blood Pressure
- Our Top 5 Spices: How Much Is Enough For Benefits?
Take care!
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‘Tis To Season To Be SAD-Savvy
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Seasonal Affective Disorder & SAD Lamps
For those of us in the Northern Hemisphere, it’s that time of the year; especially after the clocks recently went back and the nights themselves are getting longer. So, what to do in the season of 3pm darkness?
First: the problem
The problem is twofold:
- Our circadian rhythm gets confused
- We don’t make enough serotonin
The latter is because serotonin production is largely regulated by sunlight.
People tend to focus on item 2, but item 1 is important too—both as problem, and as means of remedy.
Circadian rhythm is about more than just light
We did a main feature on this a little while back, talking about:
- What light/dark does for us, and how it’s important, but not completely necessary
- How our body knows what time it is even in perpetual darkness
- The many peaks and troughs of many physiological functions over the course of a day/night
- What that means for us in terms of such things as diet and exercise
- Practical take-aways from the above
Read: The Circadian Rhythm: Far More Than Most People Know
With that in mind, the same methodology can be applied as part of treating Seasonal Affective Disorder.
Serotonin is also about more than just light
Our brain is a) an unbelievably powerful organ, and the greatest of any animal on the planet b) a wobbly wet mass that gets easily confused.
In the case of serotonin, we can have problems:
- knowing when to synthesize it or not
- synthesizing it
- using it
- knowing when to scrub it or not
- scrubbing it
- etc
Selective Serotonin Re-uptake Inhibitors (SSRIs) are a class of antidepressants that, as the name suggests, inhibit the re-uptake (scrubbing) of serotonin. So, they won’t add more serotonin to your brain, but they’ll cause your brain to get more mileage out of the serotonin that’s there, using it for longer.
So, whether or not they help will depend on you and your brain:
Read: Antidepressants: Personalization Is Key!
How useful are artificial sunlight lamps?
Artificial sunlight lamps (also called SAD lamps), or blue light lamps, are used in an effort to “replace” daylight.
Does it work? According to the science, generally yes, though everyone would like more and better studies:
- The Efficacy of Light Therapy in the Treatment of Seasonal Affective Disorder: A Meta-Analysis of Randomized Controlled Trials
- Blue-Light Therapy for Seasonal and Non-Seasonal Depression: A Systematic Review and Meta-Analysis of Randomized Controlled Trials
Interestingly, it does still work in cases of visual impairment and blindness:
How much artificial sunlight is needed?
According to Wirz-Justice and Terman (2022), the best parameters are:
- 10,000 lux
- full spectrum (white light)
- 30–60 minutes exposure
- in the morning
Source: Light Therapy: Why, What, for Whom, How, and When (And a Postscript about Darkness)
That one’s a fascinating read, by the way, if you have time.
Can you recommend one?
For your convenience, here’s an example product on Amazon that meets the above specifications, and is also very similar to the one this writer has
Enjoy!
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5 Things To Know About Passive Suicidal Ideation
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If you’ve ever wanted to go to sleep and never wake up, or have some accident/incident/illness take you with no action on your part, or a loved one has ever expressed such thoughts/feelings to you… Then this video is for you. Dr. Scott Eilers explains:
Tired of living
We’ll not keep them a mystery; here are the five things that Dr. Eilers wants us to know about passive suicidal ideation:
- What it is: a desire for something to end your life without taking active steps. While it may seem all too common, it’s not necessarily inevitable or unchangeable.
- What it means in terms of severity: it isn’t a clear indicator of how severe someone’s depression is. It doesn’t necessarily mean that the person’s depression is mild; it can be severe even without active suicidal thoughts, or indeed, suicidality at all.
- What it threatens: although passive suicidal ideation doesn’t usually involve active planning, it can still be dangerous. Over time, it can evolve into active suicidal ideation or lead to risky behaviors.
- What it isn’t: passive suicidal ideation is different from intrusive thoughts, which are unwanted, distressing thoughts about death. The former involves a desire for death, while the latter does not.
- What it doesn’t have to be: passive suicidal ideation is often a symptom of underlying depression or a mood disorder, which can be treated through therapy, medication, or a combination of both. Seeking treatment is crucial and can be life-changing.
For more on all of the above, here’s Dr. Eilers with his own words:
Click Here If The Embedded Video Doesn’t Load Automatically!
Want to learn more?
You might also like to read:
- The Mental Health First Aid You’ll Hopefully Never Need ← about depression generally
- How To Stay Alive (When You Really Don’t Want To) ← about suicidality specifically
Take care!
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Half Of Americans Over 50 Have Hemorrhoids, But They Can Be Prevented!
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It’s Q&A Day at 10almonds!
Have a question or a request? We love to hear from you!
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
❝Hello. I was hoping you could give some useful tips about how to avoid a painful ailment that has affected Ernest Hemingway, Karl Marx, David Livingstone, Napoleon, Marilyn Monroe, King Alfred, and Martin Luther, and, I confess, me from time to time … namely, hemorrhoids. Help!❞
Firstly: that list could be a lot longer! We don’t have global stats, but in the US for example, half of adults over 50 have hemorrhoids.
So, you’re certainly not alone. People just don’t talk about it.
But, there are preventative things you can do:
Fiber, fiber, fiber. See also:
Level-Up Your Fiber Intake! (Without Difficulty Or Discomfort)
Hydrate, hydrate, hydrate.
This one’s simple enough. If you are dehydrated, constipation is more likely, and with it, hemorrhoids.
Watch your meds…
Some medications can cause constipation—painkillers containing codeine are a common culprit, for example.
When you go, go!
Not only can prolonged straining promote hemorrhoids, but also (if you’ll pardon the phrasing—there’s only so delicately we can say this) simply sitting with things partway “open” down there is not good for its health; things can quickly become irritated, and that can lead to hemorrhoids.
So: when you go, go. Leave your phone in another room!
Wash—but carefully.
Beyond your normal showering/bathing routine, a bidet is a great option for keeping things happy down there, if you have that option available to you.
However, if you have hemorrhoids, don’t use soap, as this can cause irritation and make it worse.
Warm water is fine, as is a salt bath, and pat dry and/or use gentle wet-wipes rather than rougher paper.
You can follow up with a hemorrhoid cream of your choice (or hydrocortisone, unless that’s contraindicated by another condition you have)
Know when to seek help
Hemorrhoids will usually go away by themselves if not exacerbated. But if it’s getting unduly difficult, and/or you’re bleeding down there, it’s time to see a doctor.
Note on bleeding: even if you’re 100% sure you have hemorrhoids, there are still other reasons you could be bleeding, and so it needs checking out.
Hemorrhoid treatment, if needed, will vary depending on severity. Beyond creams and lotions, there are other options that are less fun but sometimes necessary, including injections, electrotherapy, banding, or surgery.
Take care!
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Spark – by Dr. John Ratey
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We all know that exercise is good for mental health as well as physical. So, what’s so revolutionary about this “revolutionary new science of exercise and the brain”?
A lot of it has to do with the specific neuroscience of how exercise has not only a mood-boosting effect (endorphins) and neuroprotective effect (helping to guard against cognitive decline), but also promotes neuroplasticity… e.g., the creation and strengthening of neural pathways, as well as boosting the structure of the brain in some parts such as the cerebellum.
The book also covers not just “exercise has these benefits”, but also the “how this works” of all kinds of brain benefits, including:
- against Alzheimer’s
- mitigating ADHD
- managing menopause
- dealing with addiction
…and more. And once we understand how something works, we’re far more likely to be motivated to actually do the kinds of exercises that give the specific benefits we want/need. Which is very much the important part!
In short: this book will tell you what you need to know to get you doing the exercises you need to enjoy those benefits—very much worth it!
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No More Aches/Tripping When Walking: Strengthen This Oft-Neglected Muscle
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Aches and pains while walking (in the feet, shins, and/or knees), as well as fatigue, are actually mostly about the oft-neglected tibialis anterior muscle.
Fortunately, it’s quite easy to strengthen if you know how:
All about the tib
The tibialis anterior is located at the front of the shin. It lifts the toes when walking, preventing trips and stumbles. Weakness in this muscle can cause fatigue as other muscles compensate, tripping as feet catch the floor, and/or general instability while walking.
Happily, there is an easy exercise to do that gives results quite quickly:
Steps:
- Stand with back and shoulders against a wall, feet 12 inches away.
- Slightly bend knees and keep posture relaxed.
- Lift toes off the ground, hold for a few seconds, then lower.
- Repeat for 10–15 reps.
To increase difficulty:
- Step further away from the wall for more ankle movement.
- Perform a “Tib Plank” by lifting hips off the wall and keeping knees straight.
It’s recommended to do 3 sets per day, with 1-minute rests between.
For more on all of this plus visual demonstrations, enjoy:
Click Here If The Embedded Video Doesn’t Load Automatically!
Want to learn more?
You might also like:
The Secret to Better Squats: Foot, Knee, & Ankle Mobility
Take care!
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