It’s time to hold nonprofit hospitals accountable

March 14, 2023 4:11 am

A doctor in one of Seattle’s tuberculosis wards checks on a patient (Photo courtesy of Seattle Public Archives via Flickr | CC-BY-SA 2.0).

Nonprofit hospitals are supposed to operate like charities, providing affordable health care to those in need while improving their communities in exchange for massive tax breaks. But the truth is that across the country – including here in Montana – nonprofit hospitals are implementing toxic policies that put profits ahead of patients.

In recent years, egregious, profit-seeking behaviors of nonprofit hospitals across the country have been spotlighted in investigations by The New York TimesAxios, the documentary film “inHospitable,” Innovation for Justice and many others. Montana health care consumers – like those across the country – have felt the impacts of nonprofit hospitals acting like big businesses.

Montana nonprofit hospitals have a “fair share deficit” of $72 million dollars in aggregate. In other words, nonprofit hospitals in Montana received a whopping $72 million more in tax breaks than they spent on charity care for low-income patients and community benefits. This isn’t surprising given the fact that nonprofit hospitals spend less on charity care than for-profit hospitals of comparable size.

Take a look at Billings Clinic, the state’s largest provider. The hospital system reported spending only 5% of its annual expenses on community benefits. Benefis Health System, a nonprofit health system, reported spending less than 2%.

Not only are Montana’s nonprofit hospitals spending less than they should on community benefits, but they are also flouting federal price transparency laws. A report by Patient Rights Advocate showed that only 17% of Montana’s hospitals comply with federal regulations requiring all hospitals to post their prices online and make them easily accessible and searchable.

Worse, as a result of Montana’s weak debt protection policies, Montanans who can’t pay their medical bills are at risk of falling victim to devastating debt collection, including having their wages garnished or bank accounts seized.

Fortunately, elected officials – both at the statehouse and in Washington, D.C. – recognize nonprofit hospitals are taking advantage of vulnerable patients and taxpayers, and are taking action to hold them accountable.

Indiana Rep. Victoria Spartz recently joined forces with Washington Representative and chair of the Congressional Progressive Caucus Pramila Jayapal to introduce legislation that would help stop anticompetitive practices by nonprofit hospitals. As Rep. Spartz said, “More than one of eight Americans…are in collections due to medical debt, which is unacceptable. Non-profit hospital status should not be a loophole to avoid antitrust enforcement.”

This sentiment is being echoed here in Montana, where state lawmakers have called for more transparency and oversight over nonprofit hospitals.

It is encouraging to see these efforts and urge our lawmakers and Gov. Greg Gianforte to do everything in their power to ensure Montana’s nonprofit hospitals act like nonprofits and provide the affordable care their communities demand. It’s time for statewide changes that will make a difference, including prohibiting hospitals from pursuing toxic debt collection practices, setting standards for charity care eligibility and obligations, and enacting standards and ceilings for common abusive practices like high interest rates on medical bills and reporting on medical debts prior to insurance determinations.

Montanans deserve nonprofit hospitals that put patients and their communities first.

Jim Manley is a former senior advisor to Sens. Edward Kennedy (D-Mass.) and Harry Reid (D-Nev.), and a Consumers for Quality Care board member.

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Jim Manley
Jim Manley

Jim Manley is a former senior advisor to Sens. Edward Kennedy (D-Mass.) and Harry Reid (D-Nev.), and a Consumers for Quality Care board member.