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Site Takes Aim at Nonprofit Hospitals’ Finances

July 22, 2008, 12:42 pm

Joe Novak sees a lot of abuse in the U.S. health-care system.

The former political and media consultant sees it in the profits earned by drug companies and the waste found in the insurance industry.

Mr. Novak also sees it in the financial practices of many nonprofit hospitals — an issue he believes does not get enough scrutiny.

With that in mind, the one-time aide to former Rep. William Lipinski of Chicago started a Washington nonprofit group called WhereTheMoneyGoes, which operates a Web site that uses public records to raise questions about the financial practices of nonprofit hospitals.

Recent posts on the site point to a building project at Sumner Regional Medical Center in Gallatin, Tenn., and the compensation packages paid to top executives at Bethesda Memorial Hospital in Boynton Beach, Fla., and Regional Health Care Services in Casa Grande, Ariz.

Mr. Novak is drumming up attention for his effort through a series of advertisements in The Washington Post, the first of which appeared Monday.

The ad, which points to the cash and investment reserves at three large nonprofit health-care institutions, asks readers why nonprofit hospitals aren’t using some of their reserves to reduce costs for patients.

“Not-for-profit hospitals have become very profitable,” the ad’s headline reads. “Newly posted data suggests that tax-exempt hospitals are contributing to the rising cost of health care.”

The criticism adds to an already lively debate about nonprofit hospitals among some lawmakers and nonprofit leaders.

Sen. Charles Grassley, an Iowa Republican, has been calling for more scrutiny of nonprofit hospitals — and has mentioned the possibility of legislation that would require such groups to spend more of their income on helping needy patients.

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