A recently released study that looked into the earning capacity of hospitals found that non-profit facilities made more from patient care services compared to their for profit counterparts.
The study was a joint effort between the John Hopkins Bloomberg School of Public health, and Washington and Lee University.
According to the study, which looked into 2013 data, seven of the top 10 most profitable US hospitals are non-profit facilities that each netted more than $150 million from patient care services.
The Gunderson Lutheran Medical Centre in Wisconsin topped the list with $302.5 million in profits. Also included in the ranks of profitable non-profits is Stanford Hospital in Palo Alto, California which raked in around $225 million and the University of Pennsylvania’s Philadelphia, earning $185 million.
The study found that the large earners among the non-profit hospitals were often part of a system, thus allowing them to dominate the local market. With more patients coming into these hospitals, they have leverage to negotiate higher prices from private insurers. With better insurance coverage in such hospitals, more patients come in, thus reinforcing their dominance in the local market.
In contrast, consumers pay more to health care providers who do not belong to a network of facilities.
However, the study recommended that these non-profits plow their earnings back into the community, citing the fact that non-profits have no need for the huge earnings they are ringing in. Specifically, it said that policy makers should consider looking into investing in more services, or lowering fees to justify their tax exempt status.
