Hospitals that make profits should pay taxes(statnews.com)
statnews.com
Hospitals that make profits should pay taxes
https://www.statnews.com/2024/04/14/nonprofit-hospitals-turn-profit-charity-care-tax-exempt-status/
211 comments
> This strikes at an issue we haven't really addressed enough in non-profits: how much community benefit do they need to offer?
A non-profit simply means that there are no investors who can profit from the business.
Non-profit and tax exempt aren’t the same thing. A non-profit must apply for tax exempt status and the IRS will look at things like public benefit vs private benefit, diversity of control etc…
A vanity hospital that is controlled by 1 person who tends to put his his name on everything, and that benefits the person running it more than the public could lose their tax exempt status.
Non-profit and tax exempt aren’t the same thing. A non-profit must apply for tax exempt status and the IRS will look at things like public benefit vs private benefit, diversity of control etc…
A vanity hospital that is controlled by 1 person who tends to put his his name on everything, and that benefits the person running it more than the public could lose their tax exempt status.
The problem is more obvious in reverse: profit is money extracted from community wealth.
It may be reinvested to create more community wealth. But until that happens it's effectively removed from the collective resource pool and monopolised by private owners for private ends.
This is not great when it's abstract numbers, but it inevitably seems to concretise as privileged individual control over property, land, exclusive status symbols such as yachts and private jets, control of media outlets, and ownership of corporations - all of which are potent destroyers of community health and community wealth.
The tail is wagging the dog. Community wealth is treated as the left-overs after privileged individuals have taken their share. It should be the other way around.
It may be reinvested to create more community wealth. But until that happens it's effectively removed from the collective resource pool and monopolised by private owners for private ends.
This is not great when it's abstract numbers, but it inevitably seems to concretise as privileged individual control over property, land, exclusive status symbols such as yachts and private jets, control of media outlets, and ownership of corporations - all of which are potent destroyers of community health and community wealth.
The tail is wagging the dog. Community wealth is treated as the left-overs after privileged individuals have taken their share. It should be the other way around.
>The problem is more obvious in reverse: profit is money extracted from community wealth.
On the contrary, profit is the part of the wealth generated by the company that remains with those who generated it!
On the contrary, profit is the part of the wealth generated by the company that remains with those who generated it!
> On the contrary, profit is the part of the wealth generated by the company that remains with those who generated it!
Only if 100% of the profit is distributed to the workers of the company.
Also, this is not relevant for a non-profit (which may also have profits).
Only if 100% of the profit is distributed to the workers of the company.
Also, this is not relevant for a non-profit (which may also have profits).
Why do you think workers should be entitled to more than they agreed contractually?
Should they also be liable for the losses incurred?
Should they also be liable for the losses incurred?
Your original statement was lacking important qualifiers. If you provide additional info, I'll be able to answer your questions.
What qualifiers?
Yeah: the old companies take everything argument (quite true for many organisations and departments).
Where's the other side of the ledger: the services and products that the company provided to the community.
Hospitals are a great example. Put money in, get some health out.
How do we value getting our bladder fixed?
It is easy to look at the money and forget what we get in return.
What value do we get from an iPhone? If no more smartphones were produced I wonder where the market price would shift to? We could even find out if China has a war.
Where's the other side of the ledger: the services and products that the company provided to the community.
Hospitals are a great example. Put money in, get some health out.
How do we value getting our bladder fixed?
It is easy to look at the money and forget what we get in return.
What value do we get from an iPhone? If no more smartphones were produced I wonder where the market price would shift to? We could even find out if China has a war.
My local hospital just had a bit of a freak out a year or two ago, and laid people off, and cut back on services because they had a $13m salary shortfall. They are the busiest ER on the west coast. in 2019-20 (right before covid), they pad $140M cash for a new tower building, and they still have a $1B 'rainy day fund'.
This is a great comment. It speaks to the tensions between being ethical/doing the right thing and running a business.
> This strikes at an issue we haven't really addressed enough in non-profits: how much community benefit do they need to offer?
I think you mean 501c3’s with their tax-deductible donations (i.e., wealth-favoring tax subsidy), not non-profits more generally. “Community benefit” is not even in principal a common feature of nonprofits (even tax-exempt nonprofits) as a class, but it is the notional justification for 501c3’s specifically.
I think you mean 501c3’s with their tax-deductible donations (i.e., wealth-favoring tax subsidy), not non-profits more generally. “Community benefit” is not even in principal a common feature of nonprofits (even tax-exempt nonprofits) as a class, but it is the notional justification for 501c3’s specifically.
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For profit corporations should also be held to the standard that they are a net benefit to society. Otherwise, why bother?
Of course it's hard to measure that benefit.
Of course it's hard to measure that benefit.
> For profit corporations should also be held to the standard that they are a net benefit to society. Otherwise, why bother?
Aren’t the profits the end goal? I’d like Bezos or Musk’s money and wouldnt really care if I’m benefiting “society” one bit to get it.
Aren’t the profits the end goal? I’d like Bezos or Musk’s money and wouldnt really care if I’m benefiting “society” one bit to get it.
Sure, I'm not talking about your attitude, I'm talking about what society should tolerate from you. If you use incorporation in a way that is harmful to society, we should dissolve your corporations.
So ideally you'd be working for your profit with an awareness that there are probably some other things that you should consider.
So ideally you'd be working for your profit with an awareness that there are probably some other things that you should consider.
We have this already, laws and regulation.
It may not meet your current form "harmful to society" but society mostly has this figured out already.
It may not meet your current form "harmful to society" but society mostly has this figured out already.
Sort of. There's an awful lot of conversation that tends to ignore it, treating profit as the only thing that merits consideration.
Start with the biggest "nonprofit": church. How much community benefit does it bring?
> However, I think we haven't really thought enough about how much community benefit they need to offer to justify being tax exempt - and it's a hard problem.
It doesn't really seem that hard. If somebody wants to build a new building to do medical research, and the medical research benefits the public, what does it harm if they also put their name on it?
If anything it's a well-aligned incentive. They'd want the thing with their name on it to be associated with public goods like curing diseases and not disreputable things like waste and corruption.
It doesn't really seem that hard. If somebody wants to build a new building to do medical research, and the medical research benefits the public, what does it harm if they also put their name on it?
If anything it's a well-aligned incentive. They'd want the thing with their name on it to be associated with public goods like curing diseases and not disreputable things like waste and corruption.
A lot of knee-jerk comments from people who didn’t read the article are missing the point it’s making and misunderstand the situation: Hospitals can be for-profit or non-profit organizations, and either role requires them to follow the law about what they must do with their profits and taxes.
The piece argues that hospitals should not be allowed to take nonprofit status. The article isn’t saying that hospitals are unique tax-free businesses (as many of the comments are suggesting at the time of writing this comment).
A more accurate title would be “Hospitals should not be allowed to operate as non-profits” but that wouldn’t incite the same reactions or generate as many clicks, of course.
The piece argues that hospitals should not be allowed to take nonprofit status. The article isn’t saying that hospitals are unique tax-free businesses (as many of the comments are suggesting at the time of writing this comment).
A more accurate title would be “Hospitals should not be allowed to operate as non-profits” but that wouldn’t incite the same reactions or generate as many clicks, of course.
Isn’t the distinction that non-profit hospitals have to plow surplus’s revenue back into the hospital versus distributing profit to investors / owners?
If so, the tax exempt status seems aligned with how for profit businesses are taxed?
If so, the tax exempt status seems aligned with how for profit businesses are taxed?
They can just create their own medical equipment supplier and funnel money that way.
Bottom line is that when you let privat businesses decide they will always choose profit over people.
Bottom line is that when you let privat businesses decide they will always choose profit over people.
Where is the funnel? The for profit supplier pays taxes, and the expenses are deductible.
They can charge whatever they want, sort of like they already do for medicine.
Not to mention that NP doesn’t prevent certain administrative and executive employees from getting excessive salaries.
But then they pay personal income tax on the salaries.
Which is the same thing that would happen to the equipment supplier. You're in no way avoiding the tax, you're just having the equipment supplier pay it on their profits.
Which is the same thing that would happen to the equipment supplier. You're in no way avoiding the tax, you're just having the equipment supplier pay it on their profits.
Not at all.
The tax rates aren’t the same and non-profits aren’t forbidden from hiring businesses for contracts, pooling money, buying property, nor securing loans.
It’s a good model for small NPs. It’s rife for large scale corruption at the scale of hundreds or thousands of employees.
The point is that we see executive salaries for NPs that match salaries for for-profits. That indicates a broken system.
The tax rates aren’t the same and non-profits aren’t forbidden from hiring businesses for contracts, pooling money, buying property, nor securing loans.
It’s a good model for small NPs. It’s rife for large scale corruption at the scale of hundreds or thousands of employees.
The point is that we see executive salaries for NPs that match salaries for for-profits. That indicates a broken system.
> The tax rates aren’t the same
At anything that could be considered a "high" salary, the personal income tax rates are higher than the corporate rates. Also, they would be exactly the same if the for-profit entity was an LLC or some other passthrough entity.
> non-profits aren’t forbidden from hiring businesses for contracts, pooling money, buying property, nor securing loans.
Neither are for-profit businesses. And then any businesses they hire would also be paying taxes on their profits.
> The point is that we see executive salaries for NPs that match salaries for for-profits. That indicates a broken system.
It indicates that the cost of hiring someone who knows how to run a hospital is the same regardless of whether you separately pay profits to shareholders.
At anything that could be considered a "high" salary, the personal income tax rates are higher than the corporate rates. Also, they would be exactly the same if the for-profit entity was an LLC or some other passthrough entity.
> non-profits aren’t forbidden from hiring businesses for contracts, pooling money, buying property, nor securing loans.
Neither are for-profit businesses. And then any businesses they hire would also be paying taxes on their profits.
> The point is that we see executive salaries for NPs that match salaries for for-profits. That indicates a broken system.
It indicates that the cost of hiring someone who knows how to run a hospital is the same regardless of whether you separately pay profits to shareholders.
A guy a worked with once did some time as an IT contractor at one of the large hospitals here in town (they are almost all now owned by the same organization) and he was telling me how this works in practice. Since they have to spend all of them the money on "improvements" it ends up on things like the wall-sized $40k television his team of 5 put in a room in a conference room in a basement that no one ever uses.
This sounds more like an internal issue than a legal one.
Departments spending all their budget in the last month of the financial year, thereby justify the following year’s budget has been a thing forever.
Departments spending all their budget in the last month of the financial year, thereby justify the following year’s budget has been a thing forever.
It's clearly either incompetence or corruption. There is no way a hospital couldn't find a legitimate use for spending an arbitrarily large amount of money. You treat more indigent patients or buy another MRI machine etc.
No. Non-profit hospitals can accumulate endowments just like non-profit universities. And that endowment usually goes into real estate or other investments, just like any other large pool of money.
margin is mission
How do you get around tricks like "Hollywood accounting"? Wouldn't we see hospitals start to mess with their numbers in the same way to avoid the threshold for regulation?
Shouldn't they be obligated to? You can't help but create taxes and tax dodging at the same time, but the fact that people try to get away with murder is no reason to make murder legal.
The problem specifically with taxes is that the line between taxable and not has to be drawn between two behaviors that people are commonly engaged in. Charity and for-profit business are both normal activities.
Then citizens will want their activity to be classified as non-profit and governments will want to classify it as for-profit and you have to establish exactly where the line is because there will be tons of people standing right on top of it. You don't want to tax charities providing cancer treatment for children, and you also don't want to cause them to waste resources paying lawyers or inefficiently structuring their activities to avoid being accused of tax evasion.
Whereas for murder, you don't have to be all that concerned you're going to over-deter people from inducing fatalities.
Then citizens will want their activity to be classified as non-profit and governments will want to classify it as for-profit and you have to establish exactly where the line is because there will be tons of people standing right on top of it. You don't want to tax charities providing cancer treatment for children, and you also don't want to cause them to waste resources paying lawyers or inefficiently structuring their activities to avoid being accused of tax evasion.
Whereas for murder, you don't have to be all that concerned you're going to over-deter people from inducing fatalities.
And hospitals regardless of profits should not be exempt from labor laws of any kind. In my state, hospitals have a specific exemption from overtime in our labor laws.
Ditto private colleges and univeristies and their endowments.
Wouldn't this create an incentive for increased management bonuses in order to "tax-optimize" the profits?
Bonuses are subject to payroll taxes. So this seems fine.
Current salaries are subject to payroll taxes
All corporations have this incentive. It's how the tax system is designed to operate.
This is silly and false. Corporations that inflate management expenses will generate less profit for shareholders. I don't think any shareholders would like that idea.
What’s silly is expecting anyone to believe your assertion.
Trimming workforce costs and padding the executive and administrative pay is an old and successful playbook.
It’s also a short-term playbook and has become a national security issue.
I’d love to see retro-active clawbacks for the CEOs and their teams that have dumped the problem on the current generation.
Trimming workforce costs and padding the executive and administrative pay is an old and successful playbook.
It’s also a short-term playbook and has become a national security issue.
I’d love to see retro-active clawbacks for the CEOs and their teams that have dumped the problem on the current generation.
And virtually every other non-profit org should also pay taxes, including churches. This is not just a federal income tax thing. The variety of local property tax abatements for supposed community benefit organizations is incredible.
I'm not an expert on the rules for charities, but there are rules that specify some ratios for genuine charitable spending, overhead, management pay, and rules re nondiscrimination, etc. As long as these regulations are strict enough to prevent gross abuse, requiring nonprofit orgs that accumulate endowments to adhere to those rules should be sufficient. But evidently those rules and the way they are enforced are not preventing gross abuses. More transparency about nonprofit finances would help guide reform. And that should include religious orgs.
There's a huge golf course in my neighbourhood that doesn't pay property taxes, but they can't build on the land.
If they had to pay property taxes, the land would probably be parceled and built upon.
I don't like it that rich people don't have to pay taxes on their little game, but I think the neighbourhood is better off with this green area.
If they had to pay property taxes, the land would probably be parceled and built upon.
I don't like it that rich people don't have to pay taxes on their little game, but I think the neighbourhood is better off with this green area.
It would be even better if the city claimed eminent domain to create a public park.
If (non-profit) hospitals that made profits were taxed, those hospitals would simply start building, donating to their charitable foundation, or using some other accounting tricks to make that profit disappear.
That would create an incentive to accept less patients, or to reject some patients at the end of the year just to fix the tax totals.
I don’t understand why people volunteer at hospitals. These are like the opposite of non-profits.
> don’t understand why people volunteer at hospitals
They’re undeniably helping. Refusing to help one person because it might benefit someone else is a touch petulant.
They’re undeniably helping. Refusing to help one person because it might benefit someone else is a touch petulant.
I think the implication is that they should be compensated. I could be misinterpreting.
Not really healthcare, but Harvard University, for example, with $30 billion endowment is a non-profit! And they don't pay property taxes even though they are the biggest land and property owners in Cambridge. Not for profit is just a lie for such institutions.
They'll just pass along the costs, because we've installed people with sociopathy as the leaders of most large businesses, and that's what sociopaths do.
They should be a well funded public service that don't make a profit in the first place.
As a kid I didn't know much about "government", but I thought surely it must be Police, Firefighters and Medical Professionals.
If you have a siren on your truck, you are government was my thinking. These are all "public goods" and even as a kid with minimal "civics" education (and what I had was pretty much 100% Pro Usa America Is A Christian Nation for those formative years that I'm talking about).
I understood that as a basic. Nobody told me that "no, actually. Despite having sirens, ambulances are not (usually) driven by workers for the government." It wasn't til I lived on my own that I really understood that.
If you have a siren on your truck, you are government was my thinking. These are all "public goods" and even as a kid with minimal "civics" education (and what I had was pretty much 100% Pro Usa America Is A Christian Nation for those formative years that I'm talking about).
I understood that as a basic. Nobody told me that "no, actually. Despite having sirens, ambulances are not (usually) driven by workers for the government." It wasn't til I lived on my own that I really understood that.
As a consequence of the two intersecting facts that this is in fact a for-profit company and the United States is organised such that this, as with many things, is regulated by the fifty States rather than federally, there's not even a training requirement.
That is, the people driving a police car, fire truck or ambulance might have no training in how to do so properly, despite the (not unreasonable) expectation from the public that they'll perform better and the legal difference in how they are treated when doing so. Some employers might do better, but there's no universal standard.
The results are predictable, excess death and injuries as a result of giving inadequately trained individuals a relatively heavier, more powerful vehicle.
That is, the people driving a police car, fire truck or ambulance might have no training in how to do so properly, despite the (not unreasonable) expectation from the public that they'll perform better and the legal difference in how they are treated when doing so. Some employers might do better, but there's no universal standard.
The results are predictable, excess death and injuries as a result of giving inadequately trained individuals a relatively heavier, more powerful vehicle.
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Even if you consider ambulance emergency service should be public service, that "sirens" argument doesn't apply to non-emergency care where you have time to make a selection among private competitors.
If it is non-emergency, why do they need sirens?
Paramedic here. Patients who are stable, we generally transport to the hospital "routine" (no lights/sirens). Similar for inter-facility transport (taking someone from a nursing facility to chemo or imaging).
The only reasons we generally transport "priority" (lights/sirens) is for unstable patients or time critical: acute cardiac or respiratory issues, stroke, hemorrhagic or multi-system trauma, or shock.
But even patients presenting stable can deteriote en route.
As an aside, generally, in most areas, what makes the biggest difference to getting a patient to definitive care in a timely manner is not lights/sirens, nor speed, it's "Opticom" (also known as traffic light pre-empting). Visual (strobe), or occasionally radio that communicates with traffic lights to give us a steady flow of green lights. That coupled with people moving over is the big difference. Speed is just an increased liability (fun fact, most state laws grant emergency vehicle drivers the ability to 'disregard' any road law while operating in any emergency mode, but that comes with a "presumptively at-fault" for any incident that occurs in that mode, i.e. you will be considered at fault unless there's evidence to the contrary).
The only reasons we generally transport "priority" (lights/sirens) is for unstable patients or time critical: acute cardiac or respiratory issues, stroke, hemorrhagic or multi-system trauma, or shock.
But even patients presenting stable can deteriote en route.
As an aside, generally, in most areas, what makes the biggest difference to getting a patient to definitive care in a timely manner is not lights/sirens, nor speed, it's "Opticom" (also known as traffic light pre-empting). Visual (strobe), or occasionally radio that communicates with traffic lights to give us a steady flow of green lights. That coupled with people moving over is the big difference. Speed is just an increased liability (fun fact, most state laws grant emergency vehicle drivers the ability to 'disregard' any road law while operating in any emergency mode, but that comes with a "presumptively at-fault" for any incident that occurs in that mode, i.e. you will be considered at fault unless there's evidence to the contrary).
God forbid we don’t monetize the existence and care of life itself.
We should not. It should be provided unconditionally to anyone needing it. Homo sapiens can do better than letting its pairs who can't pay die (slowly).
And care givers should be very well paid because they have hard jobs and critically important ones.
Making illness profitable creates bad incentives.
And care givers should be very well paid because they have hard jobs and critically important ones.
Making illness profitable creates bad incentives.
> It should be provided unconditionally to anyone needing it.
Correct me if I'm wrong but in many/most countries including the US, hospitals legally will treat emergency patients regardless of whether they can pay or are homeless-levels of broke.
Correct me if I'm wrong but in many/most countries including the US, hospitals legally will treat emergency patients regardless of whether they can pay or are homeless-levels of broke.
It's not only emergencies. I've heard people in the US hesitate to get cured because they don't have the money.
> well funded public service
There is. The US spends more per capita on socialized medicine than any of the countries that actually have socialized medicine.[0]
[0]https://data.oecd.org/healthres/health-spending.htm
A P.S. for the "but the wait times!" crowd, look at the first chart then check out hospital beds, again per capita[1]
[1]https://data.oecd.org/healtheqt/hospital-beds.htm
There is. The US spends more per capita on socialized medicine than any of the countries that actually have socialized medicine.[0]
[0]https://data.oecd.org/healthres/health-spending.htm
A P.S. for the "but the wait times!" crowd, look at the first chart then check out hospital beds, again per capita[1]
[1]https://data.oecd.org/healtheqt/hospital-beds.htm
What does hospital beds have to do with wait times? Perhaps you have data on that?
Paramedic here. You don't -stay- in the ER. You're either treated and discharged, or stabilized and moved (to surgery, to ICU, admitted). The more beds available, the shorter the ER stay, the less wait time due to throughput.
We are middle of the pack or worse on doctors[0]. We are near the bottom when it comes to how many times we get to visit the doctors we do have[1]. I can't find a high score on anything besides "Potential years of life lost"[2], sad for us that isn't a good thing.
[0]https://data.oecd.org/healthres/doctors.htm
[1]https://data.oecd.org/healthcare/doctors-consultations.htm
[2]https://data.oecd.org/healthstat/potential-years-of-life-los...
[0]https://data.oecd.org/healthres/doctors.htm
[1]https://data.oecd.org/healthcare/doctors-consultations.htm
[2]https://data.oecd.org/healthstat/potential-years-of-life-los...
Like universities?
At least with universities there is a semblance of a free market/competition/choice. I.e. you can compare universities etc. While with healthcare, nobody goes checking for yelp reviews of ambulance companies when they break their leg.
> While with healthcare, nobody goes checking for yelp reviews of ambulance companies when they break their leg.
In most progressive states, ambulance rates have to be set and approved by the Department of Health, at least. While not free market, as you suggest, this is also done for consumer protection (though I'll grant that many will argue that more could be done).
In most progressive states, ambulance rates have to be set and approved by the Department of Health, at least. While not free market, as you suggest, this is also done for consumer protection (though I'll grant that many will argue that more could be done).
But the government broke the university pricing model by guaranteeing all student loans are practically non-dischargeable through bankruptcy and then double down on their stupidity with forgiving those student loans. The government when led by naive, busy body do-gooders almost always reach the lowest optimal point.
There should be more public university capacity to compete with private university tuition rates. Some things, like health care, may be so shot through with perverse incentives in both for-profit and nonprofit configurations it should just become a public good.
Any comment on the article though?
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Why? To give terrible service and managed by bureaucrats? Or being a leech of the state medical system?
How are the current for-profit hospitals not the same in addition to being hilariously unaffordable?
Do you have data to back up the claim that private healthcare out performs public? I don't mean "if I have millions of dollars I can get treated for whatever I want, whenever I want", I mean "if you are an average person, with an average income, and average insurance what is the time to a necessary procedure, and how much will it cost you".
You can always find articles with people complaining about service in countries with actual PHS, but in my experience the same thing applies to US hospitals, with the added fun that your insurance may simply not cover anything so there's no waitlist by virtue of no treatment options, and then even if it does cover it you can still have a huge copay.
You can always find articles with people complaining about service in countries with actual PHS, but in my experience the same thing applies to US hospitals, with the added fun that your insurance may simply not cover anything so there's no waitlist by virtue of no treatment options, and then even if it does cover it you can still have a huge copay.
Very poor unsubstantiated viewpoint. The epitome of socialized healthcare would be healthcare in a communist state. And Cuba, in spite of completely inhumane and unreasonable sanctions imposed by the united states, still beats the US on metrics such as life expectancy. This proves the falsehood of the idea that state-run healthcare is inherently less efficient.
False. Cuba has shorter life expectancy than the USA.
But beyond basic stuff like immunizations, antibiotics, and trauma care, healthcare has a very small impact on life expectancy anyway. Once you have a serious chronic medical condition, even the most advanced healthcare system can generally only give you a few extra years.
But beyond basic stuff like immunizations, antibiotics, and trauma care, healthcare has a very small impact on life expectancy anyway. Once you have a serious chronic medical condition, even the most advanced healthcare system can generally only give you a few extra years.
What are you talking about, it's there clear as day, cuba beats the US on life expectancy: https://www.macrotrends.net/global-metrics/countries/CUB/cub....
What are you talking about, it's there clear as day, the US beats Cuba on life expectancy:
https://www.worldometers.info/demographics/life-expectancy/
https://www.worldometers.info/demographics/life-expectancy/
> The current life expectancy for Cuba in 2024 is 79.33 years, a 0.19% increase from 2023.
> The current life expectancy for U.S. in 2024 is 79.25 years, a 0.18% increase from 2023.
Regardless of this whole discussion we're having, I'm confused as to how we're both able to come up with such different numbers from the same source. The above are direct quotes from the website we're both looking at.
And then there's this [1] study, which finds that socialized healthcare beats privatized on life expectancy by about 10 years on average. If you don't like life expectancy as a metric, consider [2]. It compares the US to various other developed countries, the primary difference being that the other countries have socialized healthcare. Private health care loses on all but one of a much wider range of metrics.
Your belief that private health care is in some sense better is pure ideology, and has no basis in reality.
https://www.macrotrends.net/global-metrics/countries/CUB/cub...
https://www.macrotrends.net/global-metrics/countries/USA/uni...
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9653205/
[2] https://www.researchgate.net/publication/358397629_Mirror_Mi...
> The current life expectancy for U.S. in 2024 is 79.25 years, a 0.18% increase from 2023.
Regardless of this whole discussion we're having, I'm confused as to how we're both able to come up with such different numbers from the same source. The above are direct quotes from the website we're both looking at.
And then there's this [1] study, which finds that socialized healthcare beats privatized on life expectancy by about 10 years on average. If you don't like life expectancy as a metric, consider [2]. It compares the US to various other developed countries, the primary difference being that the other countries have socialized healthcare. Private health care loses on all but one of a much wider range of metrics.
Your belief that private health care is in some sense better is pure ideology, and has no basis in reality.
https://www.macrotrends.net/global-metrics/countries/CUB/cub...
https://www.macrotrends.net/global-metrics/countries/USA/uni...
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9653205/
[2] https://www.researchgate.net/publication/358397629_Mirror_Mi...
I never claimed that private healthcare is better. Don't put words in my mouth.
As for impact of various healthcare funding models on life expectancy, you appear to be confusing correlation with causation. The larger point is that healthcare system quality beyond a certain minimum level has only a small impact on life expectancy. It matters far less than lifestyle issues (diet, exercise, substance abuse) and sanitation.
As for impact of various healthcare funding models on life expectancy, you appear to be confusing correlation with causation. The larger point is that healthcare system quality beyond a certain minimum level has only a small impact on life expectancy. It matters far less than lifestyle issues (diet, exercise, substance abuse) and sanitation.
Random things like cancer and genetic diseases happen, but an awful lot of disease is caused by personal choice. Drinking, smoking, unhealthy lifestyle, etc. Personal behaviors are the cause of a huge portion of our healthcare costs.
I feel the same way about the recent auto insurance increases being caused by the shopping behaviors of others. Expensive EVs get completely totaled in accidents, and now everyone has to share in these high costs brought on by the choices of others.
The healthcare system is already one of the biggest line items for the US federal budget, yet you can see the largesse and inefficiency. Perhaps we should think very carefully about putting more money into it.
I feel the same way about the recent auto insurance increases being caused by the shopping behaviors of others. Expensive EVs get completely totaled in accidents, and now everyone has to share in these high costs brought on by the choices of others.
The healthcare system is already one of the biggest line items for the US federal budget, yet you can see the largesse and inefficiency. Perhaps we should think very carefully about putting more money into it.
But you’re already paying for other people’s illnesses through insurance with the downside of layers of middlemen taking a profit. At least here in the UK an emergency or cancer won’t bankrupt me, for the rest of it I can choose to get private health insurance if I like or wait for the NHS to work through the queue (which is sadly becoming increasingly common as our government is obsessed with copying what America does).
In the US it is not a necessity. There are private insurance plans with entry restrictions (e.
g. you are ineligible if you smoke)
Sure but you’re still paying for people’s poor health. Insurance administration costs, charging insured patients more to cover uncovered patient costs, increased equipment costs due to increasing demand from an increasingly unhealthy population, high doctors salaries because of skills shortages, the list goes on. There is simply no way to isolate yourself from the cost of other people’s health choices.
A fully privatised system gives the illusion of choice and isolation.
A fully privatised system gives the illusion of choice and isolation.
> Drinking, smoking, unhealthy lifestyle
Make those things expensive and subsidize the health system. And of course don't push people into these things in the first place. The smoking industry for instance should have never been allowed to be that powerful (and maybe smoking would not be such a good thing).
Also make the healthier alternatives cheaper (e.g. healthy food should be cheaper than junk food).
This way, you mostly solve the problem by making people with unhealthy choices fund the heath system they therefore need.
But in any case you can't really think individually: those people with unhealthy lifestyles have probably been collectively making your life better by being part of the society on which you depend for pretty much everything. Who knows, maybe someone you saved by subsidizing their cure will save you from a bus accident tomorrow. It's complex.
Make those things expensive and subsidize the health system. And of course don't push people into these things in the first place. The smoking industry for instance should have never been allowed to be that powerful (and maybe smoking would not be such a good thing).
Also make the healthier alternatives cheaper (e.g. healthy food should be cheaper than junk food).
This way, you mostly solve the problem by making people with unhealthy choices fund the heath system they therefore need.
But in any case you can't really think individually: those people with unhealthy lifestyles have probably been collectively making your life better by being part of the society on which you depend for pretty much everything. Who knows, maybe someone you saved by subsidizing their cure will save you from a bus accident tomorrow. It's complex.
I promise you, the productivity gains we’ve already gained in your lifetime outweigh any possible impact people might have by eating unhealthily. You can always argue “yeah but we could be bigger and more dominant!!” but at what point does that hit diminishing returns, life-philosophy wise?
It’s really amusing when tech people who have a full understanding of singletons and basic statistics always refer to themselves when making a broader statement about society.
I always wonder why people seemingly can’t apply their experiences beyond themselves when they already do that day to day at work.
A lot of “personal decisions” are consequences of society. Depending on where you are in society, you’re going to sometimes be forced to live an “unhealthy” life.
Beyond that, most medical care are for older folks, so you’re likely not going to notice anything until you are older.
The thing that bothers me with this personal choice thing is, our society basically expects there to always be poverty. Heck the rate of poverty across America has a “healthy” value that we aim to actually keep. Of course that same percentage is going to be leading a more unhealthy life.
Eh, rant over.
I always wonder why people seemingly can’t apply their experiences beyond themselves when they already do that day to day at work.
A lot of “personal decisions” are consequences of society. Depending on where you are in society, you’re going to sometimes be forced to live an “unhealthy” life.
Beyond that, most medical care are for older folks, so you’re likely not going to notice anything until you are older.
The thing that bothers me with this personal choice thing is, our society basically expects there to always be poverty. Heck the rate of poverty across America has a “healthy” value that we aim to actually keep. Of course that same percentage is going to be leading a more unhealthy life.
Eh, rant over.
> I always wonder why people seemingly can’t apply their experiences beyond themselves
I grew up lower middle class, and I didn't have it easy. I have no idea who my birth parents were. I had an abusive father. I was bullied and beaten relentlessly by the other children that didn't like on-the-spectrum kids. I didn't party like those that abused me, I withdrew into myself and turned that into hard work.
So when I see people [1] wanting me to pay for their choices, I feel used. When I see people demanding way more than I take for myself. It's as if the people that caused my problems are now trying to ride on my back.
Does that help lend perspective for how some people feel about calls to increase taxes to pay for this?
This doesn't mean that I'm unkind, uncaring, or unsympathetic. I just don't think US healthcare or how it is utilized is efficient, and I don't think armchair posturing or giving money to bureaucrats, administrators, or anyone without skin in the game will make it better.
edit: I removed the analogy and replaced it with a personal anecdote.
[1] The comments and downvotes here are probably from wealthy / well-off people on HN
I grew up lower middle class, and I didn't have it easy. I have no idea who my birth parents were. I had an abusive father. I was bullied and beaten relentlessly by the other children that didn't like on-the-spectrum kids. I didn't party like those that abused me, I withdrew into myself and turned that into hard work.
So when I see people [1] wanting me to pay for their choices, I feel used. When I see people demanding way more than I take for myself. It's as if the people that caused my problems are now trying to ride on my back.
Does that help lend perspective for how some people feel about calls to increase taxes to pay for this?
This doesn't mean that I'm unkind, uncaring, or unsympathetic. I just don't think US healthcare or how it is utilized is efficient, and I don't think armchair posturing or giving money to bureaucrats, administrators, or anyone without skin in the game will make it better.
edit: I removed the analogy and replaced it with a personal anecdote.
[1] The comments and downvotes here are probably from wealthy / well-off people on HN
Where's your proof the partying is causing it? Cleaning the house can be far more dangerous if you want to ask my un-sourced opinion.
EDIT The person I replied to edited their post. I'm replying to the argument:
>>> I always wonder why people seemingly can’t apply their experiences beyond themselves
>An analogy: I wonder why my lack of partying has to pay for the partying of others.
EDIT The person I replied to edited their post. I'm replying to the argument:
>>> I always wonder why people seemingly can’t apply their experiences beyond themselves
>An analogy: I wonder why my lack of partying has to pay for the partying of others.
What are they demanding that you are not? Everyone wants to be healthy and they want a medical system which helps them get there. If partying is a problem, they should be able to talk to a doctor about it, and it should be paid for as a part of the services provided by society.
Your expectations are unreasonable. The medical system is extremely expensive to operate. Highly paid physicians should be reserved for delivering the most complex care.
If consumers need guidance on making healthier lifestyle choices then doctors aren't even the best source. Utilize cheaper professionals for that stuff: therapists, counselors, social workers, dieticians, personal trainers, etc.
If consumers need guidance on making healthier lifestyle choices then doctors aren't even the best source. Utilize cheaper professionals for that stuff: therapists, counselors, social workers, dieticians, personal trainers, etc.
You are really extrapolating on what you think my expectations are. I never said everyone is entitled to a 3 hour conversation with a surgeon about the benefits of organic foods on their diets. Do you not discuss your lifestyle choices with your doctor at your yearly physical? That is as far as my expectations went for my previous comment and I believe that should be provided to every citizen of a modern society.
I don't get a yearly physical. While I do get a few periodic screenings there is no proven benefit to a yearly physical for asymptomatic adults.
https://www.ncbi.nlm.nih.gov/books/NBK82767/
When I do see a doctor I don't waste time discussing lifestyle choices with them. Doctors have minimal training in that area and it's largely a waste of time. I rely on physicians for medical issues only. There are far better sources for other topics. Instead of telling us what you believe, stick to evidence-based medicine.
https://www.ncbi.nlm.nih.gov/books/NBK82767/
When I do see a doctor I don't waste time discussing lifestyle choices with them. Doctors have minimal training in that area and it's largely a waste of time. I rely on physicians for medical issues only. There are far better sources for other topics. Instead of telling us what you believe, stick to evidence-based medicine.
Well that is quite the charmed perspective on life you have, a specialist for every question available when needed. Many don't have the access you do and a yearly chat with their primary care doctor goes a long way for their health.
You're really missing the point or being intentionally obtuse. The people who are better qualified to provide guidance on lifestyle issues are actually less expensive and more accessible than doctors.
A "yearly chat" with a primary care doctor does little or nothing for the health of asymptomatic adults. Did you even read the article I linked above?
A "yearly chat" with a primary care doctor does little or nothing for the health of asymptomatic adults. Did you even read the article I linked above?
And you are trying to make this thread into some win for yourself that it is not. My original point was that life is a common goal of all humans on this planet, for life to continue, you need health. The services to keep people healthy should be provided to all citizens of modern societies at a cost that is spread out across all citizens equitably. That is a point you have yet to address.
Please take the win you did achieve, you identified a dietitian is the right person to talk to about your diet, bravo.
Please take the win you did achieve, you identified a dietitian is the right person to talk to about your diet, bravo.
> If partying is a problem, they should be able to talk to a doctor about it, and it should be paid for as a part of the services provided by society.
I feel like I'm on an alien planet here. We should pay for people to get lifestyle advice?
This is malinvestment. Put that money into research instead.
I feel like I'm on an alien planet here. We should pay for people to get lifestyle advice?
This is malinvestment. Put that money into research instead.
Paying for people to get lifestyle advice is a great investment as it reduces both the cost of their healthcare and various externalities associated with living in a society where lots of people are unhealthy.
How much does that cost?
Edit: Why should we pay for this instead of food insecurity, education, research, etc.? Will measured outcomes give us bang for the buck?
Edit: Why should we pay for this instead of food insecurity, education, research, etc.? Will measured outcomes give us bang for the buck?
Prevention generally costs less than treatment. It’s a great way to save money overall - unless you want to be the person at the restaurant who won’t split the bill because one of your party ordered extra fries.
... I had it tough, therefore others should too? What if those others had it tougher than you? have you apologized to them for having it so much easier?
Or, hear me out, maybe the goal should be for tomorrow to be better than today, or yesterday, and that definitionally means a lot of stuff gets easier.
Complaining as you're doing here is the same as saying "this cancer treatment should be banned because I lost family members to cancer when it wasn't available, and it's unfair for cancer patients today to have it easier than we did"
Also as an addendum because you're pulling the I had it tough card: my parents had me as teenagers, then they were uni students with no money until I was 6 or 7, and I was deaf, had severe asthma, and so was relentlessly bullied due to a lisp I had because, you know, I was deaf until I was 5. We lived in a house that would be better described as a shed - corrugated steel walls and siding, etc we were not anywhere near "middle class". Guess what: I still think people should not have to go through that just because I did.
JFC.
Or, hear me out, maybe the goal should be for tomorrow to be better than today, or yesterday, and that definitionally means a lot of stuff gets easier.
Complaining as you're doing here is the same as saying "this cancer treatment should be banned because I lost family members to cancer when it wasn't available, and it's unfair for cancer patients today to have it easier than we did"
Also as an addendum because you're pulling the I had it tough card: my parents had me as teenagers, then they were uni students with no money until I was 6 or 7, and I was deaf, had severe asthma, and so was relentlessly bullied due to a lisp I had because, you know, I was deaf until I was 5. We lived in a house that would be better described as a shed - corrugated steel walls and siding, etc we were not anywhere near "middle class". Guess what: I still think people should not have to go through that just because I did.
JFC.
My original post suggests that costs should be attributed to risks.
If you take an outsized portion of health care relative to the rest of society, there's a chance that may be linked to behavioral choice. If you smoke a pack every day, eat two McGriddles every morning, film parkour stunts for your YouTube channel, go to the STD clinic monthly, are an alcoholic, etc.
Society should not be paying for this in the same way it pays for cancer and freak accidents. It's malinvestment that could have been prevented.
If you take an outsized portion of health care relative to the rest of society, there's a chance that may be linked to behavioral choice. If you smoke a pack every day, eat two McGriddles every morning, film parkour stunts for your YouTube channel, go to the STD clinic monthly, are an alcoholic, etc.
Society should not be paying for this in the same way it pays for cancer and freak accidents. It's malinvestment that could have been prevented.
If health insurance were priced according to individual risk then a huge swathe of the population wouldn’t be able to afford health insurance (as indeed is still the case to some extent, even after Obamacare). And that’s assuming that you leave Medicare and Medicaid in place - which logically you shouldn’t, according to your line of argument.
How it could be a malinvestment for a society to invest in the health of...its very own constituents, is a nut that I won’t attempt to crack.
How it could be a malinvestment for a society to invest in the health of...its very own constituents, is a nut that I won’t attempt to crack.
Yeah, it’s really amazing I had a republican/now-maga coworker who vehemently opposed Obamacare and said it was unnecessary as people who were risky should shoulder increased insurance costs, and could not understand that my partner literally could not get insurance for any amount, every insurance company was literally saying “you donated a kidney [were healthy enough to donate a kidney] and because you only have one kidney we will not cover you, good luck!”.
It wasn’t even “we won’t cover kidney issues” (ignoring that finding a kidney donor saves insurance companies money) it was a blanket “we will not accept you as a customer”.
To this day the dude thinks Obamacare is bad, and that people should “take responsibility”. (I’m unsure how people born with congenital defects are meant to take responsibility but dudes a maga and thinks a bunch of his coworkers aren’t people so I assume the same applies to people with congenital issues)
It wasn’t even “we won’t cover kidney issues” (ignoring that finding a kidney donor saves insurance companies money) it was a blanket “we will not accept you as a customer”.
To this day the dude thinks Obamacare is bad, and that people should “take responsibility”. (I’m unsure how people born with congenital defects are meant to take responsibility but dudes a maga and thinks a bunch of his coworkers aren’t people so I assume the same applies to people with congenital issues)
Sounds like you want to apply value calculation to people - is this person's life worth the same or more than this other person's? Then they can get healthcare.
And we can see that because you're complaining about, for example, parkour stunts, but not the much more common sports that cause significant injuries.
I get that it's a common desire to say "this person does not deserve to live because I don't like their choices", but like so many other things it turns out that the cost of trying to do this is always more significant than just not assigning value to people's lives, and those policies have a tendency to capture people you don't think it should apply to. Take the various conservative anti-women laws that suddenly became a problem when they interfered with IVF for middle aged white women, despite that being a completely consistent application of the claimed rationale for the law (if an embryo is a live human, then IVF requires murder, but everyone knows an embryo is not a person, the goal of these laws, much like your desire to restrict access to healthcare, is about punishing people for perceived slights).
I might have thought you could also see how the costs associated with many illnesses might contribute to the proportionally higher tax rates on things like alcohol and tobacco in countries with public health services.
But there's more to it than that, you're arguing against a Public Health Service as though your claimed concern about unreasonable costs from bad life choices does not apply to private healthcare+insurance, but that's simply not true. Your insurance premiums are priced to cover the YouTube stunters, the alcoholics, the people playing sports, the people driving, etc just like a Public Health Service. The only difference is that your insurance companies and hospitals are making a profit as well so definitionally cost more as applied to the total economy (a statistic that has been repeatedly shown is that the US spends more on healthcare than countries with PHS, but has lower coverage and worse outcomes). Because the metric for success in a public health service is treatment, the system is optimized to treat the most people. For private health care the metric is income, which means hospitals charge more, and optimize their billing to maximize the amount that can extract from insurance companies (that's why your anesthesia for a surgery is inexplicably billed as a separate procedure), and insurance companies optimize to deny or delay coverage as much as possible.
And we can see that because you're complaining about, for example, parkour stunts, but not the much more common sports that cause significant injuries.
I get that it's a common desire to say "this person does not deserve to live because I don't like their choices", but like so many other things it turns out that the cost of trying to do this is always more significant than just not assigning value to people's lives, and those policies have a tendency to capture people you don't think it should apply to. Take the various conservative anti-women laws that suddenly became a problem when they interfered with IVF for middle aged white women, despite that being a completely consistent application of the claimed rationale for the law (if an embryo is a live human, then IVF requires murder, but everyone knows an embryo is not a person, the goal of these laws, much like your desire to restrict access to healthcare, is about punishing people for perceived slights).
I might have thought you could also see how the costs associated with many illnesses might contribute to the proportionally higher tax rates on things like alcohol and tobacco in countries with public health services.
But there's more to it than that, you're arguing against a Public Health Service as though your claimed concern about unreasonable costs from bad life choices does not apply to private healthcare+insurance, but that's simply not true. Your insurance premiums are priced to cover the YouTube stunters, the alcoholics, the people playing sports, the people driving, etc just like a Public Health Service. The only difference is that your insurance companies and hospitals are making a profit as well so definitionally cost more as applied to the total economy (a statistic that has been repeatedly shown is that the US spends more on healthcare than countries with PHS, but has lower coverage and worse outcomes). Because the metric for success in a public health service is treatment, the system is optimized to treat the most people. For private health care the metric is income, which means hospitals charge more, and optimize their billing to maximize the amount that can extract from insurance companies (that's why your anesthesia for a surgery is inexplicably billed as a separate procedure), and insurance companies optimize to deny or delay coverage as much as possible.
> Sounds like you want to apply value calculation to people
To behavior. If you buy a sports car, you pay higher car insurance. If you buy a motorcycle, you should pay higher health insurance. If you live riskily or unhealthily, your coverage should cost more and not be averaged out over the less risky.
Risk calculus should be considered with everything. It's essential to extending a home loan, but not when granting a college loan. Decoupling risk leads to bad outcomes.
> but not the much more common sports that cause significant injuries.
I think sports players should pay more for injury insurance. And roofers, loggers, etc. Those costs will be absorbed by their respective industries where the costs are generated.
> this person does not deserve to live because I don't like their choices
I'm not saying that at all, and that's such a cartoon way of looking at this. You walk into a hospital in America and you get treatment. That doesn't mean you don't have to pay for it.
> I might have thought you could also see how the costs associated with many illnesses might contribute to the proportionally higher tax rates on things like alcohol and tobacco in countries with public health services.
I never said do not tax negative externalities. By all means, please do. We should tax drugs too.
> Your insurance premiums are priced to cover the YouTube stunters, the alcoholics, the people playing sports, the people driving, etc just like a Public Health Service.
I would like them to not. I would like to cover my risk profile.
Everyone should cover their own risk profile. That's fair and equitable.
> Because the metric for success in a public health service is treatment, the system is optimized to treat the most people.
It already does this. This is simply about who gets the bill.
To behavior. If you buy a sports car, you pay higher car insurance. If you buy a motorcycle, you should pay higher health insurance. If you live riskily or unhealthily, your coverage should cost more and not be averaged out over the less risky.
Risk calculus should be considered with everything. It's essential to extending a home loan, but not when granting a college loan. Decoupling risk leads to bad outcomes.
> but not the much more common sports that cause significant injuries.
I think sports players should pay more for injury insurance. And roofers, loggers, etc. Those costs will be absorbed by their respective industries where the costs are generated.
> this person does not deserve to live because I don't like their choices
I'm not saying that at all, and that's such a cartoon way of looking at this. You walk into a hospital in America and you get treatment. That doesn't mean you don't have to pay for it.
> I might have thought you could also see how the costs associated with many illnesses might contribute to the proportionally higher tax rates on things like alcohol and tobacco in countries with public health services.
I never said do not tax negative externalities. By all means, please do. We should tax drugs too.
> Your insurance premiums are priced to cover the YouTube stunters, the alcoholics, the people playing sports, the people driving, etc just like a Public Health Service.
I would like them to not. I would like to cover my risk profile.
Everyone should cover their own risk profile. That's fair and equitable.
> Because the metric for success in a public health service is treatment, the system is optimized to treat the most people.
It already does this. This is simply about who gets the bill.
> The comments and downvotes here are probably from wealthy / well-off people on HN
This is funny because statistically wealthy people are the ones usually against increases in taxes.
I was born in Iran, so I’ve dealt with my fair share of bullshit. My conclusion from my life is that we are individuals and we are a collective as well. A collective where if there’s a lot of illness in a part of it, it makes us all sick.
Second off we literally do not need more taxes to have proper healthcare in this country. We do not have a money problem, but a politics and policy problem. We have a problem that a lot of people think that by helping others, they’re the ones getting punished.
A healthy society means a society that has more energy and time to work on problems that benefit us all.
May I suggest this, instead of seeing healthcare coverage for more people as a punishment for you, see it as a collective investment to allow people to focus on things that matter.
And, note that healthcare isn’t the point of service by a doctor. It means healthy city design. Healthy subsidies for food (instead of subsidies HFCS for example). It means better public transit. It means actual neighbors and neighborhoods. It means longer weekends.
This is funny because statistically wealthy people are the ones usually against increases in taxes.
I was born in Iran, so I’ve dealt with my fair share of bullshit. My conclusion from my life is that we are individuals and we are a collective as well. A collective where if there’s a lot of illness in a part of it, it makes us all sick.
Second off we literally do not need more taxes to have proper healthcare in this country. We do not have a money problem, but a politics and policy problem. We have a problem that a lot of people think that by helping others, they’re the ones getting punished.
A healthy society means a society that has more energy and time to work on problems that benefit us all.
May I suggest this, instead of seeing healthcare coverage for more people as a punishment for you, see it as a collective investment to allow people to focus on things that matter.
And, note that healthcare isn’t the point of service by a doctor. It means healthy city design. Healthy subsidies for food (instead of subsidies HFCS for example). It means better public transit. It means actual neighbors and neighborhoods. It means longer weekends.
Ah yes those people wanting real healthcare. What entitled idiots. Anyways let's finance another 200 mio yacht for the pharma ceos, they worked hard after all. You might be one of the one day since you work hard...
Wait… they don’t already? What is even going on over there?
If they are for-profit they do. HCA Hospitals is the biggest for-profit and they paid $1.6 billion in taxes last year.
A lot of hospitals are non-profits or not-for-profits. Profits they make must legally go toward furthering their stated cause and cannot be paid out as dividends.
A lot of hospitals are non-profits or not-for-profits. Profits they make must legally go toward furthering their stated cause and cannot be paid out as dividends.
But. They can be paid as salaries. :)
Yes but the salaries have to be reasonable. You can’t setup a charitable organization and then pay yourself $10 million a year to run it.
And the people getting paid are usually separate from the people in charge. Most of the time board members of non-profits are either unpaid or are paid a small token amount. When they are paid, it’s not going to be a meaningful chunk of the profits.
And the people getting paid are usually separate from the people in charge. Most of the time board members of non-profits are either unpaid or are paid a small token amount. When they are paid, it’s not going to be a meaningful chunk of the profits.
Note that in the article, non-profit hospitals paid their top three CEOs $20 million.
"The top three hospital administrators there made nearly $20 million in salaries."
"The top three hospital administrators there made nearly $20 million in salaries."
The CEO is an employee of the board. From a non-profit perspective that’s no different than spending $20 million on a building.
LOL! At least a building can hold beds.
Again CEO salary usefulness isn’t relevant to the claim that “Non-profits can’t distribute profits, but they can pay salaries.”
The people in control, the board, can’t pay themselves crazy salaries. That is the relevant point.
The people in control, the board, can’t pay themselves crazy salaries. That is the relevant point.
For-profit hospitals that actually turn profits do pay income taxes. The concern is with non-profit hospitals. They don't distribute profits to shareholders. But some do pay high salaries to employees or have large and growing endowment funds. The author is arguing that threatening to tax some of those funds would incentivize non-profit hospitals to lower prices and give out more charity care. This isn't necessarily a bad idea but I am skeptical whether this would actually achieve results.
It gets into more arcane policy than clear economic effects.
Why are dividends taxed, but not investments in a shell company that collects dividends? Corporations aren't natural people (spare me the inane conflation of "legal person" with "natural person", everyone who doesn't understand why those two concepts have distinct legal names), so there is no inherent reason why there's any need to tax organizations instead of the people who profit from them as owners or wage earners or vendors.
Why are dividends taxed, but not investments in a shell company that collects dividends? Corporations aren't natural people (spare me the inane conflation of "legal person" with "natural person", everyone who doesn't understand why those two concepts have distinct legal names), so there is no inherent reason why there's any need to tax organizations instead of the people who profit from them as owners or wage earners or vendors.
The dividend deduction avoids double-taxation, that should be obvious. The dividend-issuing organization pays taxes on its income; that income is then distributed effectively post-tax (although the exact % dividend deduction depends on ownership percentage).
Why should a parent corporation have to pay taxes twice just because of its corporate structure?
Why should a parent corporation have to pay taxes twice just because of its corporate structure?
Such corporate structures are often set up for the express purpose of optimizing tax. Replacing corporate tax with dividend tax would remove incentives from setting up such structures, which is a good thing.
Apart from that, double taxation is a reality for natural persons since they have to pay income tax and VAT. Corporations are usually not subject to the latter.
Apart from that, double taxation is a reality for natural persons since they have to pay income tax and VAT. Corporations are usually not subject to the latter.
> The concern is with non-profit hospitals. They don't distribute profits to shareholders. But some do pay high salaries to employees or have large and growing endowment funds.
The non-profit healthcare organizations in my metro area spend tons of money expanding by building new clinics, surgery centers, specialty clinics, hospital wings, etc.
The non-profit healthcare organizations in my metro area spend tons of money expanding by building new clinics, surgery centers, specialty clinics, hospital wings, etc.
Had the same thought when I read the title. Then "Ah, the old non-profit that's really a for-profit in disguise." A tale as old as dimes (and nickels). Bricks also (the gold variety).
Notably, article written by: Marty Makary, M.D., M.P.H., professor at the Johns Hopkins School of Medicine and Carey Business School. Even some of the doctors don't seem to like the situation much.
Be weird being a doctor where you didn't like your own hospital's priorities very much, except I read those doctor/nursing stories all the time. The UK situation's been so depressing I mostly avoid those articles when I check the Guardian.
The profit motive (or disguised non-profit cousin) has also been leading to what seems like not sane work hours of 12+ shifts in a lot of cases, which is another issue [1]. The nurses seem to hate it, the staff say its not safe, yet the profit says 12h shifts.
[1] https://human-resources-health.biomedcentral.com/articles/10...
Notably, article written by: Marty Makary, M.D., M.P.H., professor at the Johns Hopkins School of Medicine and Carey Business School. Even some of the doctors don't seem to like the situation much.
Be weird being a doctor where you didn't like your own hospital's priorities very much, except I read those doctor/nursing stories all the time. The UK situation's been so depressing I mostly avoid those articles when I check the Guardian.
The profit motive (or disguised non-profit cousin) has also been leading to what seems like not sane work hours of 12+ shifts in a lot of cases, which is another issue [1]. The nurses seem to hate it, the staff say its not safe, yet the profit says 12h shifts.
[1] https://human-resources-health.biomedcentral.com/articles/10...
Corruption?
so should religions that make profits pay taxes, something tells me neither will happen
Every church and religious order I've done work with on commercial projects paid taxes like any other commercial entity. The factor that determines if they pay taxes seems to be if they're engaged in what the government sees as commerce or if they see it as charity/practice of religion. Church bookstores, at least the ones I've been involved with, had to pay taxes. Donations for the operating of the church and charity work was not taxed. Apparently the IRS has plenty of tests to determine which is which.
That may also be a factor of states that implement recoverable taxes, where moreso than showing an exemption, the organization pays the tax, but gets to deduct that amount from tax owed.
Along with private university endowments.
The endowments of the Ivy League schools are nearing a combined $200b and schools like Stanford and MIT not far behind. These “schools” have become investment funds with a side hustle educating students to maintain their tax status and solicit alumni donations. There’s no reason why they shouldn’t be taxed, especially with many of them charging upwards of $50k/yr in tuition, much of which gets paid with grants and loans guaranteed by the government.
The endowments of the Ivy League schools are nearing a combined $200b and schools like Stanford and MIT not far behind. These “schools” have become investment funds with a side hustle educating students to maintain their tax status and solicit alumni donations. There’s no reason why they shouldn’t be taxed, especially with many of them charging upwards of $50k/yr in tuition, much of which gets paid with grants and loans guaranteed by the government.
It's rare when your life depends on going to a church, at least compared to the need to go to the ER or have surgery etc
But I get what you mean
But I get what you mean
There are religious organizations that own hospitals. I was flabbergasted when I found out about this recently. My first thought was how they’ve got a perfect system to avoid all taxes.
Edit: it seems like the typical derailment is happening when it comes to religion. The topic is about taxes. I mentioned taxes. Not if religious organizations should own hospitals.
Edit: it seems like the typical derailment is happening when it comes to religion. The topic is about taxes. I mentioned taxes. Not if religious organizations should own hospitals.
> There are religious organizations that own hospitals. I was flabbergasted when I found out about this recently.
Why would you be surprised at this? In (e.g.) Christianity, caring for the poor and sick has been one of the central tenants since its inception, so why wouldn't formal institutions be organized doing so?
Before the welfare state—which is a fairly recent invention—the largest organization would have been the Church (and its various religious orders: Dominicans, Franciscans, etc), which would have worked towards its three-fold mission of worshipping God, evangelizing, and serving the poor:
* https://www.youtube.com/watch?v=O9m-pNsFPV0
It can reasonably be argued that the very idea of taking care of the poor, etc, only came into Western civilization because of Christianity. As someone who presumably lives with-in Western civilization and adheres to its (general) values, you take the idea for granted, without perhaps examining where it/they came from:
* https://en.wikipedia.org/wiki/Dominion_(Holland_book)
* https://en.wikipedia.org/wiki/The_WEIRDest_People_in_the_Wor...
Why would you be surprised at this? In (e.g.) Christianity, caring for the poor and sick has been one of the central tenants since its inception, so why wouldn't formal institutions be organized doing so?
Before the welfare state—which is a fairly recent invention—the largest organization would have been the Church (and its various religious orders: Dominicans, Franciscans, etc), which would have worked towards its three-fold mission of worshipping God, evangelizing, and serving the poor:
* https://www.youtube.com/watch?v=O9m-pNsFPV0
It can reasonably be argued that the very idea of taking care of the poor, etc, only came into Western civilization because of Christianity. As someone who presumably lives with-in Western civilization and adheres to its (general) values, you take the idea for granted, without perhaps examining where it/they came from:
* https://en.wikipedia.org/wiki/Dominion_(Holland_book)
* https://en.wikipedia.org/wiki/The_WEIRDest_People_in_the_Wor...
> It can reasonably be argued that the very idea of taking care of the poor, etc, only came into Western civilization because of Christianity.
You can try that argument but it's not very convincing. I think you could do equally well arguing that slavery is the fault of Christianity, or warfare or various other things humans have sometimes done and sometimes not done...
The ancient Greeks (so, significantly before Christianity and also influential for "Western civilization") have a whole bunch of goddesses representing the idea of specific kinds of being nice to others. Plutarch is like "Philanthropy is a good idea".
You can try that argument but it's not very convincing. I think you could do equally well arguing that slavery is the fault of Christianity, or warfare or various other things humans have sometimes done and sometimes not done...
The ancient Greeks (so, significantly before Christianity and also influential for "Western civilization") have a whole bunch of goddesses representing the idea of specific kinds of being nice to others. Plutarch is like "Philanthropy is a good idea".
> You can try that argument but it's not very convincing. I think you could do equally well arguing that slavery is the fault of Christianity […]
You can also argue for a Flat Earth, but all your arguments given would be bad: given that slavery existed before Christianity arrived on the scene, and early Christians (e.g., Gregory of Nyssa) argued against it, that would contain a bunch of bad arguments as well. The history of Western thought as outlined in (e.g.) Siedentop's Inventing the Individual shows how Christianity moved the needle from slaves to serfs to individual freedom:
* https://www.goodreads.com/book/show/18740986-inventing-the-i...
This can further be expounded on in Brundage's The Medieval Origins of the Legal Profession illustrating how everyone—pauper to Pope—was afforded a fair shake at justice (due process in law) going back to (at least) the Middle Ages:
* https://press.uchicago.edu/ucp/books/book/chicago/M/bo562094...
See also Whitman's The Origins of Reasonable Doubt: Theological Roots of the Criminal Trial for an interesting run-down on that topic:
* https://www.goodreads.com/book/show/2187985.The_Origins_of_R...
> The ancient Greeks (so, significantly before Christianity and also influential for "Western civilization") have a whole bunch of goddesses representing the idea of specific kinds of being nice to others.
And how many orphanages did the Ancient Greeks and Ancient Romans have? (Versus leaving children outside to die from exposure.) Or hospitals:
> The declaration of Christianity as an accepted religion in the Roman Empire drove an expansion of the provision of care. Following First Council of Nicaea in 325 CE construction of a hospital in every cathedral town was begun. Among the earliest were those built by the physician Saint Sampson in Constantinople and by Basil of Caesarea in modern-day Turkey towards the end of the 4th century. By the beginning of the 5th century, the hospital had already become ubiquitous throughout the Christian east in the Byzantine world,[3] this being a dramatic shift from the pre-Christian era of the Roman Empire where no civilian hospitals existed.[1]
* https://en.wikipedia.org/wiki/History_of_hospitals#Roman_Emp...
The current-day 'Western values' are Christian values. The most recent instance of non-Christian values being practiced in the West would probably be Nazism, and before that Nietzsche's observation that you either accept a supernatural entity and have (e.g.) Christian values, or you have nihilism and morals are arbitrary (in After Virtue, MacIntyre outlines why any one system (by Kierkegaard, Marx, Kant, Hume, etc) is just as arbitrary as any other (agreeing with Nietzsche in the binary choice that is available)).
You can also argue for a Flat Earth, but all your arguments given would be bad: given that slavery existed before Christianity arrived on the scene, and early Christians (e.g., Gregory of Nyssa) argued against it, that would contain a bunch of bad arguments as well. The history of Western thought as outlined in (e.g.) Siedentop's Inventing the Individual shows how Christianity moved the needle from slaves to serfs to individual freedom:
* https://www.goodreads.com/book/show/18740986-inventing-the-i...
This can further be expounded on in Brundage's The Medieval Origins of the Legal Profession illustrating how everyone—pauper to Pope—was afforded a fair shake at justice (due process in law) going back to (at least) the Middle Ages:
* https://press.uchicago.edu/ucp/books/book/chicago/M/bo562094...
See also Whitman's The Origins of Reasonable Doubt: Theological Roots of the Criminal Trial for an interesting run-down on that topic:
* https://www.goodreads.com/book/show/2187985.The_Origins_of_R...
> The ancient Greeks (so, significantly before Christianity and also influential for "Western civilization") have a whole bunch of goddesses representing the idea of specific kinds of being nice to others.
And how many orphanages did the Ancient Greeks and Ancient Romans have? (Versus leaving children outside to die from exposure.) Or hospitals:
> The declaration of Christianity as an accepted religion in the Roman Empire drove an expansion of the provision of care. Following First Council of Nicaea in 325 CE construction of a hospital in every cathedral town was begun. Among the earliest were those built by the physician Saint Sampson in Constantinople and by Basil of Caesarea in modern-day Turkey towards the end of the 4th century. By the beginning of the 5th century, the hospital had already become ubiquitous throughout the Christian east in the Byzantine world,[3] this being a dramatic shift from the pre-Christian era of the Roman Empire where no civilian hospitals existed.[1]
* https://en.wikipedia.org/wiki/History_of_hospitals#Roman_Emp...
The current-day 'Western values' are Christian values. The most recent instance of non-Christian values being practiced in the West would probably be Nazism, and before that Nietzsche's observation that you either accept a supernatural entity and have (e.g.) Christian values, or you have nihilism and morals are arbitrary (in After Virtue, MacIntyre outlines why any one system (by Kierkegaard, Marx, Kant, Hume, etc) is just as arbitrary as any other (agreeing with Nietzsche in the binary choice that is available)).
> The current-day 'Western values' are Christian values. The most recent instance of non-Christian values being practiced in the West would probably be Nazism
I'm sure this feels right to you, but to get there you have to decide that the actual "Western values", which have little to do with Christianity, are instead somehow Christian, while the contrary practices of some Christians aren't.
The Nazis were mostly Christians, it could hardly have been otherwise given how Christian Germany was at the time. Yes, some Nazis wanted to destroy Christianity (and all of them wanted a Church subservient to their politics, but that was true everywhere, it's why the Church of England even exists) but on the whole they're a product of Christianity, even if that's uncomfortable for you.
I'm sure this feels right to you, but to get there you have to decide that the actual "Western values", which have little to do with Christianity, are instead somehow Christian, while the contrary practices of some Christians aren't.
The Nazis were mostly Christians, it could hardly have been otherwise given how Christian Germany was at the time. Yes, some Nazis wanted to destroy Christianity (and all of them wanted a Church subservient to their politics, but that was true everywhere, it's why the Church of England even exists) but on the whole they're a product of Christianity, even if that's uncomfortable for you.
Great points. But you missed the mark. The discussion is about taxes not if religions should own hospitals. The same poor people you mention have to pay taxes while the religious organizations get special cuts. If we are blind to how profitable and mutually beneficial relationships hospitals and insurance companies have, there is nothing else to discuss.
> The discussion is about taxes not if religions should own hospitals.
This sub-thread is, as I was commenting on:
> There are religious organizations that own hospitals. I was flabbergasted when I found out about this recently.
This sub-thread is, as I was commenting on:
> There are religious organizations that own hospitals. I was flabbergasted when I found out about this recently.
What's worse is they enforce their religious worldview at these hospitals, denying legal medical treatments based off of the largest human hoax and political control mechanism ever invented by man.
In Germany some of the best hospitals are Christian (catholic I believe, but may be wrong). The US is a really weird place.
There's a bunch of local hospitals that are all run by a religion, but so far as I know, it doesn't dictate what they will and won't do for patients. So while I'm sure there are some religious hospitals that deny treatment, it's not all of them.
The US is a really, really big place. Our states are the size of many countries. I'm not surprised that there's incredibly diverse sets of circumstances here.
The US is a really, really big place. Our states are the size of many countries. I'm not surprised that there's incredibly diverse sets of circumstances here.
Plenty of good Christian hospitals here too. I suspect the parent is referring specifically to abortions, there are other procedures that a Christian would be potentially unwilling to perform (sex change operations, for instance), but they tend to require an experienced surgeon specifically trained in that operation, which wouldn't be hired by the hospital due to not aligning with their mission (would you want the government to force you to hire a .NET developer when you're purely an embedded systems shop?).
As for abortions in particular, if you are of the opinion that procedure would be murder, it would certainly be out of place for the government to force you to do it. How many folks who promote the government forcing doctors to do what they consider to be killing children would be okay with the government forcing them to kill another human in their day job?
As for abortions in particular, if you are of the opinion that procedure would be murder, it would certainly be out of place for the government to force you to do it. How many folks who promote the government forcing doctors to do what they consider to be killing children would be okay with the government forcing them to kill another human in their day job?
The same is true in the US. Some of the best hospitals (and complete integrated health systems) are run by Christian churches. This is largely for historical reasons: decades ago, churches stepped in to deliver healthcare as part of their mission because governments and secular organizations weren't doing enough. Some of them do refuse to perform certain services, particularly certain women's reproductive services, on moral grounds. This can make it difficult for women in some areas to access care.
Ha. But it is weird as well in Germany, because the churches are not bound to the normal Labour law and can for example discriminate against gay folks without recourse. Which is even more ridiculous given that most of the funds for the catholic/protestant schools and hospitals are payed by the tax payer/health insurances.
Hospitals were invented by religious organizations. It’s not strictly going to be driven by tax avoidance
It’s not practical to implement this because of the first amendment.
> Congress shall make no law __respecting an establishment of religion, or prohibiting the free exercise thereof__; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
I'm not sure if I quite understand your point. I suppose profiting off of religion could be potentially considered a form of support, I believe that if anything, a tax exemption is a more meaningful form thereof.
Granted, that does not change the fact of the matter, no such law could be instituted today because institutions/entities/people profiting from it are too big to fail. Remember what Scientology did to the IRS?
I'm not sure if I quite understand your point. I suppose profiting off of religion could be potentially considered a form of support, I believe that if anything, a tax exemption is a more meaningful form thereof.
Granted, that does not change the fact of the matter, no such law could be instituted today because institutions/entities/people profiting from it are too big to fail. Remember what Scientology did to the IRS?
It has nothing to do with the first amendment. The government isn't restricting what churches say, it's just saying that they get an active benefit by not talking about political topics (which is widely ignored). They're free to talk about taxes all they like, but that just means they get treated like the rest of us.
[deleted]
Churches and other religious orgs should absolutely pay taxes.
> so should religions [...] pay taxes
Oh, heck, let's not get into that argument here...
Oh, heck, let's not get into that argument here...
my final answer is that any group organization should pay taxes AND no individual should have to pay taxes
also, let's at least admit the resaon this is a heated argument is because religions are actually the 'legacy' and retired version of the government
also, let's at least admit the resaon this is a heated argument is because religions are actually the 'legacy' and retired version of the government
The hike idea of a “nonprofit” is dumb and ripe with abuse.
Nonprofits still have to pay payroll, the phone bill etc. Why have someone deciding that they don’t have to pay taxes? They can certainly just show a loss for year after year.
Nonprofits still have to pay payroll, the phone bill etc. Why have someone deciding that they don’t have to pay taxes? They can certainly just show a loss for year after year.
The idea is that we want more of what nonprofits do. No taxes is an incentive.
A nonprofit that turns a profit is presumably putting it to work eventually, such as adding a new wing. It's not as if they can do stock buybacks because there isn't any.
There are many ways this structure is abused but the idea isn't absurd.
A nonprofit that turns a profit is presumably putting it to work eventually, such as adding a new wing. It's not as if they can do stock buybacks because there isn't any.
There are many ways this structure is abused but the idea isn't absurd.
Do we want more of what they do? They don’t have to show a profit — they can continue to lose Korey and get donations. But there’s no need to have a special category.
A lot of ideas aren't absurd until they meet reality. The arguments that defend an idea don't really matter in the long run, if we can later see that the outcomes they provide aren't good.
I look at one of our local private universities: A non profit with a huge endowment. Their prices keep going up, and then discount enough to make sure the student's price is as heavy as they could possibly bear. They put that money into real estate investment, but they don't actually do anything with the land: It's just always worth more to them than it is to other parties, because they don't pay property taxes. So for them the cost of speculation is the lowest there is. Land speculation is far worse than redevelopment into useful things, but instead, we are rewarding it.
So I look at the actual outcomes of the non-profit status, and I don't see how in the world they are good for the area around the university: We are lowering our tax base for the privilege of letting them keep blight around them, which then in return lowers prices, letting them buy even more land at a discount. So I look at the incentive, and I see that it's doing far more damage than what it makes. So it doesn't matter that it sounds good on paper: We shouldn't argue with the reality that is in front of our eyes.
We should tax them regardless.
I look at one of our local private universities: A non profit with a huge endowment. Their prices keep going up, and then discount enough to make sure the student's price is as heavy as they could possibly bear. They put that money into real estate investment, but they don't actually do anything with the land: It's just always worth more to them than it is to other parties, because they don't pay property taxes. So for them the cost of speculation is the lowest there is. Land speculation is far worse than redevelopment into useful things, but instead, we are rewarding it.
So I look at the actual outcomes of the non-profit status, and I don't see how in the world they are good for the area around the university: We are lowering our tax base for the privilege of letting them keep blight around them, which then in return lowers prices, letting them buy even more land at a discount. So I look at the incentive, and I see that it's doing far more damage than what it makes. So it doesn't matter that it sounds good on paper: We shouldn't argue with the reality that is in front of our eyes.
We should tax them regardless.
> Their prices keep going up, and then discount enough to make sure the student's price is as heavy as they could possibly bear.
Isn't this consistent with their mission? If a student comes from millionaires, they can pay the full rate. Others get a discount according to need.
> They put that money into real estate investment, but they don't actually do anything with the land
This is caused by the opposite of what you're objecting to: What they should be doing is renting out the property and using the revenue to further their mission. But as soon as they do that the state would start collecting both property tax and income tax on the rent, even if 100% of the rental income is going to the non-profit's mission. Between that and the costs of maintaining a rental property, you've made productive use into a net loss and created the perverse incentive to do nothing with the property instead.
In theory the "problem" with this is that a non-profit could operate a profit-making business as a funding source, but why is that a problem? If an independent for-profit business can deduct a donation to a charity, why shouldn't a charity be able to deduct a "donation" to itself?
Isn't this consistent with their mission? If a student comes from millionaires, they can pay the full rate. Others get a discount according to need.
> They put that money into real estate investment, but they don't actually do anything with the land
This is caused by the opposite of what you're objecting to: What they should be doing is renting out the property and using the revenue to further their mission. But as soon as they do that the state would start collecting both property tax and income tax on the rent, even if 100% of the rental income is going to the non-profit's mission. Between that and the costs of maintaining a rental property, you've made productive use into a net loss and created the perverse incentive to do nothing with the property instead.
In theory the "problem" with this is that a non-profit could operate a profit-making business as a funding source, but why is that a problem? If an independent for-profit business can deduct a donation to a charity, why shouldn't a charity be able to deduct a "donation" to itself?
NYU or Columbia?
I want more of what businesses do. Why are nonprofits special?
Business expenses are tax deductible too. Businesses essentially only pay income tax on net profit.
Because a non profit cannot keep the profits (duh), thus all the extra money has to go back into the economy. Since every purchase has VAT they are effectively already paying a tax on their profits and shouldn't be further taxed
Whey shouldn’t they be further taxed? And if they lose money, as most do, they won’t owe any tax anyway.
The special category doesn’t add anything to a legit charity but does help out fraudsters.
The special category doesn’t add anything to a legit charity but does help out fraudsters.
Do I need to repeat verbatim my reply to you?
You simply asserted that they "shouldn't be further taxed" and my question was why you think so. Repeating your comment verbatim would not answer my question.
>You simply asserted that they "shouldn't be further taxed"
That assertion sits in the same sentence that provides the justification
That assertion sits in the same sentence that provides the justification
The point is that they can make sure that they don't have any extra money by giving themselves raises, or overspending with friendly vendors.
Instead of paying out profits to shareholders, a non-profit hospital/clinic will use their excess dollars to build new facilities, buy new equipment, and add the capacity to care for more people.
How is that worse than a for-profit company? If your local healthcare systems are not expanding while the regional population is expanding, you’ll have less care available for all regional residents.
There are ways to abuse non-profit status, but operating a large hospital and clinic system isn’t one of them.
How is that worse than a for-profit company? If your local healthcare systems are not expanding while the regional population is expanding, you’ll have less care available for all regional residents.
There are ways to abuse non-profit status, but operating a large hospital and clinic system isn’t one of them.
1. I go into hospital and come out with 90k bill - I have insurance and I pay my copay of $130.
2. Insurance says "nah, we'll give you 18k"
3. Hospital goes "ok".
4. Hospital writes off as a 72k loss, which essentialy is a "tax deduction".
This is good for me, but such a perverse incentive for the hospital.
2. Insurance says "nah, we'll give you 18k"
3. Hospital goes "ok".
4. Hospital writes off as a 72k loss, which essentialy is a "tax deduction".
This is good for me, but such a perverse incentive for the hospital.
Or. It's more like this
- $90k bill - you pay your annual $10k deductible - the remaining $80k is only covered 80% because emergency visits only have 80% co insurance - you now owe $16k, after you've already paid $10k out of pocket for the deductible
This is a real thing that happened to me recently. Not to mention I pay $1500/month for a family of 4.
Nothing, absolutely nothing about the U.S. healthcare pricing structure is good for patients.
It seems to have worked out for you because you appear to have very good insurance. Most people are like me, and have the type of insurance that should be illegal.
- $90k bill - you pay your annual $10k deductible - the remaining $80k is only covered 80% because emergency visits only have 80% co insurance - you now owe $16k, after you've already paid $10k out of pocket for the deductible
This is a real thing that happened to me recently. Not to mention I pay $1500/month for a family of 4.
Nothing, absolutely nothing about the U.S. healthcare pricing structure is good for patients.
It seems to have worked out for you because you appear to have very good insurance. Most people are like me, and have the type of insurance that should be illegal.
I don't know your personal situation but most consumers who obtain medical insurance through their employer or a state exchange can pick between bronze/silver/gold plans that trade off monthly premiums versus deductible/co-pay/co-insurance amounts. High deductible plans can be a great option for many consumers, especially those who are willing to take on more risk and actively shop around for non-emergency care.
The trick of the current plans, which wasn't the same back in the day, is that hospital and ER costs after the fact are nor covered 100% after deductible: Most plans say 90%. So yes, we might be better off with the plan that covers less, but ultimately the problem is that we are risking far more than the deductible, as a truly catastrophic problem will go way, way past the deductible... and out of pocket maximums can be far higher than deductibles.
Most of us now have very few employer-based options, which happen to be almost always better because the employer subsidizes some. So it's not unlikely to see that the options you'd prefer are not available. High deductible, but OOP maximum very close to the deductible? Sorry, not available, go look at the secondary market for more insurance. It's a very difficult environment to make decisions on, and most people are just not all that well equipped financially to deal with it. The products have gotten way too complicated for the vast majority of people.
Most of us now have very few employer-based options, which happen to be almost always better because the employer subsidizes some. So it's not unlikely to see that the options you'd prefer are not available. High deductible, but OOP maximum very close to the deductible? Sorry, not available, go look at the secondary market for more insurance. It's a very difficult environment to make decisions on, and most people are just not all that well equipped financially to deal with it. The products have gotten way too complicated for the vast majority of people.
I just had ~250k$ billed to me for a surgery and a 4 day hospital stay. I walked out with only paying 2500$. Just a touch over 1% of the total cost billed. I pay ~400$ a month. I’m in the US.
What is your max out of pocket that you paid $16k in a year?
I'd have to look again, but it's right around $18k. It's like $17,950 or something like that. It's an odd number.
[deleted]
99% sure that's now how accounting works. A loss is when expenses are more than revenue, not when you earn less than you wanted to.
Roofing and construction contractors would be all over this if they could avoid taxes simply by negotiating down an invoice.
Roofing and construction contractors would be all over this if they could avoid taxes simply by negotiating down an invoice.
If I interpret TFA coorectly, the 72k difference would probably be counted as "charity care". Which is different than a loss, but still tax deductible.
In the grand scheme of things, this causes multi-level market "malfunctions". First, hospitals are incentivized to bloat bills, making healthcare virtually unaffordable if you don't have the bargaining power of an insurance company. Worse, this ties employees to their employer who subsidizes their healthcare plan (for another tax deduction I presume), thus twisting the dynamics of the labour market in favour of the employers.
In the grand scheme of things, this causes multi-level market "malfunctions". First, hospitals are incentivized to bloat bills, making healthcare virtually unaffordable if you don't have the bargaining power of an insurance company. Worse, this ties employees to their employer who subsidizes their healthcare plan (for another tax deduction I presume), thus twisting the dynamics of the labour market in favour of the employers.
[deleted]
What happens when Microsoft "donates" $1B "worth" of its $0 cost copies of software to a school?
This is not really what happens.
Hospitals and payers negotiate rates and contract at that rate before the service is provided. Assuming the service is not denied by the payer, the hospital knows that they'll only be reimbursed 18k from your insurance company (or at least has the data to know in advance, putting aside whether any one person could tell you what it will be). The 90k only served as a starting point for negotiation with payers and is usually obscenely high due to other regulatory and contractual reasons related to the negotiation process. Their "list rate" is shown on your bill, but was absolutely never expected to be received.
As a result, it's not a "loss" of revenue at the time of service, and isn't recognized as one.
Now, because GAAP requires revenue be recognized when realized and earned, that service became "revenue" to the hospital after service, even though they haven't been paid. They might later "write that off" (I.e. recognize a loss) if the payer ultimately denies that claim, or you refuse your responsibility (I.e. your copay). But in that case, the hospital did not, in fact, make the money.
Hospitals and payers negotiate rates and contract at that rate before the service is provided. Assuming the service is not denied by the payer, the hospital knows that they'll only be reimbursed 18k from your insurance company (or at least has the data to know in advance, putting aside whether any one person could tell you what it will be). The 90k only served as a starting point for negotiation with payers and is usually obscenely high due to other regulatory and contractual reasons related to the negotiation process. Their "list rate" is shown on your bill, but was absolutely never expected to be received.
As a result, it's not a "loss" of revenue at the time of service, and isn't recognized as one.
Now, because GAAP requires revenue be recognized when realized and earned, that service became "revenue" to the hospital after service, even though they haven't been paid. They might later "write that off" (I.e. recognize a loss) if the payer ultimately denies that claim, or you refuse your responsibility (I.e. your copay). But in that case, the hospital did not, in fact, make the money.
> usually obscenely high due to other regulatory and contractual reasons related to the negotiation process
Lets be real its due to greed nothing else.
Lets be real its due to greed nothing else.
There are plenty of industries in which purely being greedy is much easier than it is in healthcare. Greed alone does not explain the depth of complexity involved in the US healthcare pricing system.
To be clear, I’m not defending the system either. It’s fundamentally broken by design. But it’s certainly not solely the greed of hospitals that got us here.
To be clear, I’m not defending the system either. It’s fundamentally broken by design. But it’s certainly not solely the greed of hospitals that got us here.
Healthcare has a cartel restricting supply of new doctors, and new hospitals. Only a small number of new doctors can intern each year ensuring the relative supply decreases vs population. The same for hospitals - even if you have the money and the doctors you can't open one unless the other hospitals in the area agree one is needed and allow you to get a “Certificate of Need”.
But that wasn't enough to juice profits so pricing had to be made as opaque as possible to screw over anyone who isn't a giant insurance company ensuring the little guy without insurance who "pays his bills" pays more than 10x anyone else in the system.
I don't know of any other industry with this level of depravity and greed.
But that wasn't enough to juice profits so pricing had to be made as opaque as possible to screw over anyone who isn't a giant insurance company ensuring the little guy without insurance who "pays his bills" pays more than 10x anyone else in the system.
I don't know of any other industry with this level of depravity and greed.
Wouldn't they reasonably be limited to writing off actual expenses rather than the made up price?
It seems hard to search on, but it doesn't really look like there are tax benefits from contractual adjustments.
It seems hard to search on, but it doesn't really look like there are tax benefits from contractual adjustments.
That’s correct. The post you replied to has the common misunderstanding of how write offs work. They’re not a magic way to make money. They’re a way to not pay taxes on money that want actually made.
You can’t do that because then every contractor can pay zero tax if they charge 100k an hour but have them pay 100$, and you got 99k loss.
It is weird that in this case insurance company is not taxed on the 72k "profit" they made...
This is not good for you in long term. This is how the insurance mafia operates and why everything is so expensive. U maybhave a so called "good" insurance but someone is paying somewhere. A 90k bill should not be a thing regardless.
There are certainly examples of outrageous and abusive billing practices; policy makers should do more to reign those in. But a single MRI machine can cost $3M. Weeks in an ICU can burn up hundreds of hours of staff time. It's easy to see how the bill for a complex episode of care can exceed $90K even when the provider organization isn't making a profit.
That is a loophole every business would use if it worked that way. Why wouldn't every banana Walmart sells be $500 on their books then? Losses need to be actual losses, not profits that never materialized.
This actually doesn’t make sense if you run the figures. But I guess, “they just write it off!”
I don't think that's GAAP compatible, that seems far too easy.
A non-profit simply means that there are no investors who can profit from the business. However, I think we haven't really thought enough about how much community benefit they need to offer to justify being tax exempt - and it's a hard problem.
For example, let's say I run a non-profit hospital. We start getting a lot more revenue than costs. At a for-profit company, that's profits, but we don't have any investors. I decide "No, we shouldn't lower prices or forgive medical debt. I want to use that excess money to create a fancy new medical building with my name on it and to create a medical research unit that will bring prestige to the hospital (and hopefully useful medical research that will help people in the future)." Right now, that's an allowable non-profit use of that money. Universities do things like this all the time: a fancy new student center takes precedence over lower tuition.
How do we deal with this? It's hard. New buildings aren't simply unjustified costs. My city wants to build a new elementary school because the current one is crumbling. A hospital or university will likewise need to invest in its facilities, but at some point it potentially crosses a threshold from necessary and useful spending toward vanity and serving the institution more than it serves the mission. Universities spend money on research-only professors who don't teach and things like that drive up tuition costs, but is that a reasonable expense for a university? It can depend on who you ask because different people will have different opinions on the purpose of a university.
It's also hard because a successful non-profit will want to reinvest in itself and keep enough excess on hand in case something bad happens. Let's say I'm running a hospital and our costs are $1B in 2022 and we took in $1.2B. I use the excess $200M to rebate some of the fees to patients and forgive some medical debt. In 2023, our costs are again $1B and we took in $0.9B. Now I'm in a tough position. Do I lay off staff? Pay cuts? Take out a loan for $0.1B? What if 2024 is also a lean year?
Likewise, let's say that I'm trying to run a patient-friendly facility. We take people without insurance and don't make them worry about the cost. Even if I'm able to successfully run my facility, other non-profit facilities that aren't as friendly are taking in more money. They start to pay their doctors better. Their facilities are newer and better kept. Nurses complain that I'm being stingy with their contract. The other hospitals are publishing fancy papers and their doctors are giving conference talks that attract donors away from my hospital.
I think there's a survivorship thing happening here. If you have too little runway, you don't survive lean times. You run out of money and one of the less friendly hospitals "buys" your hospital (which often isn't a cash purpose since they're non-profits, but some sort of promise of keeping the mission of being a hospital alive).
Should the government bail out non-profits who are serving the community better? Maybe, but it's hard to define that. The fancy non-profit hospitals will argue that they're serving the community even better. The rich and connected probably see the fancy hospitals as better and are likely their donors. The general public probably doesn't understand that one hospital might be more forgiving than another. So the general political consensus will likely be "why should the taxpayer bail out a place that's 'poorly run' when the 'well run and better' hospital is willing to bail them out with no cost to the taxpayer?"
So, in order to keep my hospital, I can't run it too friendly. Plus, for my ego, I'd rather people think well of my hospital. I'd like to brag about the fancy new facility and have people think I'm doing something amazing. We give a lot more esteem to the president of Harvard than to the president of a school that's educating and helping way more people, but isn't as fancy.