Non Profit Hospitals? Where does the money go?

[dennis in se pa]

There is a local so called "non profit" hospital that charges fees that are twice what Johns Hopkins charges. So I am told. This organization is always building large new facilities. How can there not be any profits, yet they have all this money for new projects? Is this just a scam so they don't have to pay property taxes?

[Moses]

Non profit hospitals typically use their "profit" for program development. Buildings, operating rooms, durable medical equipment like CT scanners and such. They also pay for educational and outreach programs for diabetes, breast cancer, etc.

Some "not for profits" also have OUTRAGEOUS executive compensation. Local Sutter Health has 9 executives making more that $1 million/year. The John Muir CEO made $7.45 million in 2008.

[dennis in se pa]

"OUTRAGEOUS executive compensation"
Why can't a regular business do the same thing. That is - make no profit but pay the executives high salaries?
What makes a hospital different?
Isn't this like scam?

[pavulon]

I believe Hopkins is also not-for-profit...and their website shows some impressive buildings...and some impressive donors. I also know a guy who worked there and indicated it wasn't nearly a great as the reputation would have you believe.

Don't write off a hospital because it doesn't have some big shot name. Check a hospital's morbidity and mortality stat's online.

[RWebb]

Originally Posted by dennis in se pa

"OUTRAGEOUS executive compensation"
Why can't a regular business do the same thing. That is - make no profit but pay the executives high salaries?
What makes a hospital different?
Isn't this like scam?

yes it is

hospitals are designed to care for sick people, most bizs are not - hosp.s can take adv. of that

we have a terrible scammer non-profit hospital here supposedly run by some nuns but with no taxes, super high exec salaries, and aggressive expansionist plans that actually harm the community and expose patients to catastrophes (built a new hospital in the middle of the most dangerous flood plain around) -- people here call it Sacred Wallet

[teenerted1]

when income>payout isnt that for-profit
when income=payout isnt that non-profit.
when income < payout isnt that government

[RWebb]

no, a non-profit org. is a creature of state & federal law, designed to benefit the public and thus not taxed, tho they often have to pay fees to the govt. for "processing" or what-have-you

[pavulon]

A well-run business can be a small or large not-for-profit hospital (no taxes) that HAS to provide the same service to ANYONE regardless of their ability (inability) to pay and vilified for doing it

or

May be an entirely for profit (No money? Get out of the building.) Fortune 500 business, pay no taxes and be celebrated as a capitalist flagship.

[Rick Lee]

My wife worked for a very welathy non-profit in DC that just had to look for ways to spend all their income. They had a 35 hr. work week, 100% 403b matching, lavish parties, nominal parking fee in underground garage in downtown DC, generous salaries and on and on. Good work if you can get it. I work exclusively with non-profits and gov't. agencies and try to hold my laughter when some of them try to cry poverty because they're a non-profit.

[dennis in se pa]

Non profit hospital = scam. Is that what I am seeing here?
The execs make all the money?
I have a relative involved in this.
If she is involved it involves a scam. She is too stupid and lazy to actually work for a living. But she is evil. A perfect fit for this hospital scam business.

[widebody911]

One of my (many) X/gf's was a mid-level manager at a 'non-profit' HMO. They paid very well. She was pulling in the mid 200's, with a nice yearly 5-figure bonus. Not bad for 34.

[Noah930]

Wow, Thom. I need to take to heart the adage: if you can't beat 'em, join 'em.

Maybe I should look into that evening MBA course from Pepperdine...

[LakeCleElum]

Originally Posted by dennis in se pa

Non profit hospital = scam. Is that what I am seeing here?
The execs make all the money?
I have a relative involved in this.
If she is involved it involves a scam. She is too stupid and lazy to actually work for a living. But she is evil. A perfect fit for this hospital scam business.

I have to respectfully disagree with you......I have many nurses in the family (both sides), my mother had a Masters degree in Nursing Administration. They all say care is better in a "non-profit".

I recently stayed 5 days in a "for profit" hospital when I had knee replacement. I was so mad at their care and "cost cutting" efforts, I almost called an ambulance on my last night to take me to hospital that would take care of me....

When I told my Doc, he was pissed and asked me to write him letter with my concerns
.
The letter was 4 pages long. Bottom line, I told the administrator we would sit in his office and discuss this or the local media would have a press conference in front of his house on the local golf course. (I have contacts in the local media)....

Bottom line: I'll take a non-profit any time .......

[wdfifteen]

Originally Posted by dennis in se pa

Why can't a regular business do the same thing. That is - make no profit but pay the executives high salaries?

We do. I then loan the money back to the company (a C corp) for business development, equipment etc. I don't think an LLC or S corp can do that though.