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August 28, 2008

Nonprofit Hospitals Under Fire for High Costs

Nonprofit hospitals are being scrutinized by lawmakers and health-care advocates for their increasing revenues, expanding facilities, and generously paid executives, and for what critics call a decreased emphasis on providing charity care, reports The Wall Street Journal.

As an example of the controversy, The Journal spotlights Carilion Health System, which serves the Roanoke, Va., area. Carilion, which expanded in 1989 when it merged with the city’s only other hospital, now holds $1-billion in assets. The hospital said it receives about $50-million a year in tax exemptions. It dispensed $42-million in charity care in 2007 and $30-million in 2006.

The hospital has come under fire for its pricing, which critics say has helped spike local medical-care costs. For example, reports the newspaper, Carilion charges 4 to 10 times as much for a colonoscopy as does a local endoscopy center. Today, health-insurance rates in Roanoke are the highest in the state, whereas once they were the lowest.

Carilion says it must charge more for some procedures to subsidize its emergency room and care for uninsured patients.

But others say the hospital charges more because it represents a monopoly. “It’s a one-market town here in terms of health care,” says Sam Lionberger, who owns a local construction firm. “Carilion has the leverage.”

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Thursday August 28, 2008 | Permalink

Comments

1. Where is that extra $8-million in tax exemptions going…? Carilion should use that to “subsudize its emergency room and care for uninsured patients.”

   — anonymous    Aug 28, 04:40 PM    #

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