Stopping Profiteering in "Not-for-Profit" Hospitals

Thursday, April 10th, 2008

http://www.progressivestates.org/dispatch [1]

Stopping Profiteering in "Not-for-Profit" Hospitals

It's counter-intuitive, but many US not-for-profit hospitals have bigger profits than their for-profit counterparts.  Last week, a Wall Street Journal article [6] discussed the growth of profits in the not-for-profit hospital sector and the welcome attention this is garnering from federal policymakers.  As reported, the combined net income of the 50 largest not-for-profit hospitals across the US increased nearly eight-fold from 2001 to 2006 to a staggering $4.27 billion. 77% of the 2,033 not-for-profit hospitals in the US routinely make money, compared with 61% of for-profit hospitals.

In return for their not-for-profit status and $12.6 billion in tax exemptions, these hospitals must provide a "community benefit".  Many people assume this means charity care, or free care for the uninsured and indigent, but the term is so loosely defined that some hospitals have been reporting the wages they pay to employees as a community benefit.  Another problem is that ostensibly non-profit hospitals have entanglements with for-profit subsidiaries that line the pockets of staff and affiliated professionals affiliated with these supposedly non-profit hospitals.

To shed light on not-for-profit hospitals and the community benefits provided, the IRS will require hospitals to break-down their community benefit contributions starting in 2009.  The new reporting standards are welcome, but minimum standards for providing charity care are a must next step.

What Can States Do? All of Maine's community hospitals are non-profit.  However, as highlighted by a report from Consumers for Affordable Health Care [7], concerns that the hospitals were generating consistent profits even while hospital costs were increasing in Maine at rates far above regional and national rates, helped lead to enactment of Chapter 249 [8].  This 2005 law requires Maine hospitals to disclose financial information about each tax exempt entity as well as for-profit entities in which a hospital has a controlling interest.  

To ensure communities are getting value for the tax exempt status of not-for-profit hospitals, Community Catalyst's Hospital Accountability Project [9] offers research, fact sheets, and model legislation for state policy .  Resources include:

• Model Legislation: 
  • Health Care Institution Responsibility Model Act [10] and Commentary to the Model Act [11]
  • The Patient Financial Assistance Act [12]
• State Laws:
  • Free Care: A Compendium of State Laws [9]
  • New York State Requirements Relating to Community Benefits and Free Care [13] 
  • Hospital Care Assurance Program in Ohio [14]
• Strategy:
  • Guide to Negotiating with Providers to Improve Access to Health Care Services [15]

Voter Identification Laws: The Specter of Fraud Helps the Right Wing Shape the Electorate

Since the federal Help America Vote Act (HAVA) established the requirement that first time voters present some form of identification before voting in a federal election, voter identification requirements of all sorts [16] have been enacted across the country.  Currently 26 states have laws that are more restrictive than the HAVA mandate, and 21 states require ID from voters every time they vote.  These laws have been passed by arguing they are necessary to prevent voter fraud, even though all evidence suggests that such fraud is extremely rare [17] and poses no threat to the integrity of our voting systems.  Instead, these fraud arguments have merely been a partisan tool, used for decades, to suppress turnout [18] among new groups entering the electorate in large numbers and threatening the power of those currently in charge, whether they be minorities, immigrants or students.

Evidence of Suppressed Voter Turnout: Sadly, the evidence suggest that these efforts to reduce turnout and shape the electorate for partisan gain [19] are most likely effective and have the greatest impact on poor, less educated, elderly and minority voters. One scholar has estimated that requiring photo identification from all voters would disenfranchise 20 million people [20].  Indiana and Georgia currently have such a photo identification requirement in order for a vote to be counted.  A challenge to the Indiana law [21] has been heard [22] by the US Supreme Court and a decision is expected by June.

Voter identification laws have also become a favorite tool of anti-immigrant forces and in the 2007-2008 legislative sessions 18 states [23] have introduced bills to require that voters prove they are US citizens.  Fortunately for voters, the only one of these bills to be passed into law [24] so far applies to just one town in Delaware.

Defeating Bad Bills: Legislators in many states are still pushing to impose new voter ID requirements in states that lack them, and continue to argue for making existing requirements more stringent by narrowing the types of ID that can be used.  Happily, it seems that at least temporarily the wave of new voter ID laws in waning as more bills are being voted down than up.  However, we expect that if the Supreme Court rules as expected, and allows Indiana’s photo ID requirement to stand, there will be an even stronger push from conservative forces on this issue in the coming legislative session.  Here’s what has been active in the current session:

• Kansas is poised to pass [25] Senate Bill 169 [26] which will require photo ID at the polls.  The bill has passed both houses in different versions and now goes to conference committee for reconciliation. One good feature of the bill passed in the House is that it includes anti-Voter Intimidation language [27] to attempt to prevent vote suppression of legal voters using the provision.
• In Oklahoma the Senate has passed SB 1150 [28] creating a photo ID requirement for voting.  A similar measure, HB 2956 [28], has also passed the House.  Even though passage of one or other of the measures seems assured, Democratic lawmakers have strongly opposed [29] the bill.
• In Mississippi voter ID has been a contentious issue throughout the session, and has even prompted the Republican caucus to propose loosening felony disenfranchisement rules as a compromise to get it passed.  But while Republican lawmakers have managed to revive the bill by waiving the normal deadline for action [30], the bill appears dead for now [31].
• A bill in Wisconsin, AJR 17 [32], would have amended the state constitution to require ID when voting.  The bill passed the house last year but died in the Senate last month amidst very contentious debate [33] when lawmakers refused to suspend the rules and release it from committee.
• In Maryland lawmakers defeated HB 1355 [34], which would have required ID to vote, in committee [35].
• Consideration of a Colorado ID bill, HB 1039 [36], was postponed indefinitely in February.
• Legislation put forward by the California Secretary of State requiring ID to vote, SB 173 [37], was defeated in committee.
• Virginia Senators defeated SB 554 [38] which would have required ID to vote.  A more restrictive bill in the House, HB 65 [39], requiring voters provide valid, state-issued photo ID has been carried over to the 2009 session on a voice vote in committee.

Victories on National Popular Vote, Paid Family Leave and Overseas Voting

A few key legislative victories in the last week worth noting:

• Illinois Governor Signs National Popular Vote Bill:  Illinois became the third state after Maryland and New Jersey to enact National Popular Vote (NPV) interstate compact into law, which when a sufficient number of states approves it, will ensure that the Presidential candidate receiving the majority of votes nationally becomes President.  This follows legislative victories of NPV [40] in the Maine and Vermont Senates in recent weeks.  A total of 16 legislative chambers have now approved NPV.
• New Jersey Approves Paid Leave:  Following a vote in the Assembly last month, the New Jersey State Senate approved [41] a bill, NJ S 786 [42], to provide six weeks of paid leave to care for a new child or a sick relative, a bill Gov. Jon Corzine has said he will sign.  38,000 workers are expected to take advantage of the program each year, receiving two-thirds of their pay or up to $524 a week, paid for by a new payroll tax of $33 per year per worker.   New Jersey joins California and Washington state in providing paid leave for its working families.

• Minnesota Moving to Make Overseas Voting Easier:  Addressing the problem, devastating for military abroad, that 80% of all overseas ballots are not counted, the Minnesota House voted unanimously [43] for a bill, MN HF1259 [44], authored by Rep. Jeremy Kalin and Sen. Sharon Erickson Ropes, that will allow overseas voters to receive their ballots electronically, deliver a second ballot to them if their cast ballot is lost in the mail, and will professionalize local procedures for counting absentee ballots in general.   The state Senate has supported similar legislation and the governor is expected to sign the bill. If finally enacted, Minnesota will join fifteen other states that have passed similar policies to help overseas voters.