Thursday, August 28, 2008

Non Profit?

Sickening article in the WSJ today (the link is to the abbreviated WSJ Blog; you have to be a subscriber to WSJ to read the entire piece) about the Carilion Hospital outside Roanoke, Virginia. Carilion bought the hospital on the other side of town ten years ago and have proceeded to consolidate power in such a fashion that would make the likes of Hitler and Stalin jealous.

Basically, Carilion operates as a giant multi-specialty clinic with the doctors working as employees of the hospital. Doctors who elected to remain independent were quickly vanquished by an unspoken policy of "internal referral", i.e. don't be sending any patients to those guys down the street who aren't a part of Carilion. Numerous established practices dried up and were forced to relocate to other parts of the country. As a result, when you get sick in Roanoke, you have one place to go. Consequently, get ready to pay $4300 for a colonoscopy (five times what you'll pay in the rest of the country).

Some other choice aspects of the article:

- The newspaper reporter who was "re-assigned" after he had published a series of negative articles about Carilion. Carilion complained and withdrew its advertising from the paper; next you you know, the reporter is filing stories for the traffic beat.

-The Carilion board members benefitting financially from the construction of a new clinic complex via a shady back door contract bidding process.

-The vicious nature of Carilion's collections process. "In its fiscal year ended September 30, Carilion says it sued 9,888 patients, garnished the wages of 5,478 people and placed liens on 3,920 homes." Non-profit indeed....This from a hospital that collects a cool $50 million in tax exemptions every year.

14 comments:

walt dandy said...

Lack of competition = diminished incentive for performance + unchecked greed = dogshit sandwich for physicians and patients alike

Anonymous said...

As you may know this is a major issue currently in Akron, Ohio. We are building a for-profit hospital in northern summit county. There has been a huge backlash by one of the "non-profit" hospitals in the area. They claim this will pull away all the profitable patients from their institution(AGMC). What most people do not understand is that these not-for-profit hospitals suck up all the profit and spit it out in the form of huge salaries for Chairs of Departments and CEO's. That is equal to owning stock in a for-profit facility. They have as much at stake to make their hospital profitable. In my opinion the non-profits are basically a shell game. Take the example in Akron. Akron General is non-profit. Their main hospital is in the inner-city, yet they built new ER's in affluent areas along with Health and Wellness Centers. So instead of building a hospital in the nicer areas, they build ER's in these nicer areas to funnel those well-insured patients to their mothership. They are not building these ER's in the poorer areas to help the poor and "serve a need". What a joke

Buckeye Surgeon said...

Anon- I couldn't agree more. This label "non-profit" is a sham, nothing more than a get out of jail free card when it comes to federal tax responsibilities. Same problem with the Evil Empire in downtown cleveland. There's a reason why MetroHealth (Cleveland's charity hospital) is on the verge of total collapse. Non-profits aren't shouldering their share of the burden for the delivery of health care to the uninsured. Meanwhile, the EE looks to build a hospital in Dubai....

HudsonMD said...

Mothership and EvilEmpire. Great ways to describe the bullies that claim to be "non-profit". My biggest beef with this whole argument is the hypocrisy of the "non-profits". I wish they would just admit what their primary goal is(to make money and pay high-salaries to the upper crust). MetroHealth is a as close to a Non-Profit as any hospital out there. Our business venture in Northern Summit County is absolulely for profit. But this project originally was discussed to have the physician really and truly have a say in the delivery of health care. The quality of the staff, equipment, etc. There is real accountability if the product is bad. There are no suits telling you what shohuld be done. All hospitals have a reputation. The better the care that is delivered, the busier that facility will be. I feel that most physicians are ethical enough to make decisions based solely on the patient's best interest and not economical factors. If you are not able to do that then you should not be a physician. Physician ownership in various aspects of the medical system has been around for a long while. Whether you own stress testing, echo, physical therapy or some other for profit ancillary service we all hope that referrals are evidence based.

J Bond said...

For more interesting reading on non-profit health organizations...see www.guidestar.com...IRS 990 forms published.

Robin said...

Local media responded to the WSJ article (interview with Carilion CEO, I believe). Got yer boots and shovel?

List of videos and stories

Anonymous said...

Thanks for bringing this article to the attention of more folks. I used to work for them and the article is just the tip of the iceberg. Go to the blog section of the wsj: http://blogs.wsj.com/health/2008/08/28/the-lucrative-life-of-a-nonprofit-hospital

The comments are interesting and many written by local folks in the know. Another intersting fact about how the local paper and the facility are in cahoots is that the WSJ is the one reporting that they are buying an independent freestanding surgical and radiology center. This information is not found on the newspaper's web site nor in the paper as I read it daily. Two days ago the paper announced it bought the largest oldest cardiology practice.

This monolith is eating everyone up and clearly building on a monopoly.

Robin said...

The local TV stations mentioned it, with WDBJ7 actually saying the most. (See link in previous comment above.) When I used google news to see what was out there, I got several stories, and found one by the Roanoke Times, at least online:
http://www.roanoke.com/news/breaking/wb/174936

I found another about Carilion's CEO: Carilion CEO earned $2.27 million last fiscal year

Frank Drackman said...

Cmon Buckeye, Didn't you hear? THERE IS NO MAFIA!!

Bongi said...

i can't believe it!!! i do a colonoscopy for about R1500. (divide that by about 7 to convert to $)

and i sometimes feel i ask too much.

Anonymous said...

Please vote for this project to give the artisans a decent life. For details visit this project...

http://www.membersproject.com/project/view/SQVEE2

make mine trauma said...

You have been selected to receive the “Arte y pico” award!

Bongi said...

it seems you have been awarded the “arte y pico” award twice.

Anonymous said...

According to federal regulation, a nonprofit organization (501c3 status) may obtain a profit, although the positive funds must be utilized in a manner that is 'seeming responsible' such as general operations or programs. Therefore, if the hospital secured a revenue of $1,000,000 in 2007, they can plug that back into their general budget for whatever they seem fit, i.e. salaries. Thus yes if they believe their CEO is worth a $500,000 raise the board of directors may do so. From my analysis, most board of directors do not contain multiple physicians on committees.