More than half of the nation’s 5,000 hospitals operate as not-for-profit entities. In theory non-profit hospitals get an exemption from income tax, property tax, sales tax and get preferential financing because they provide a public service to the communities in which they operate. I worked for a large non-profit hospital system years ago and a financial analyst did the math and estimated our tax exclusion was worth something like $100 million a year. In return for the huge tax advantage all the hospital had to do was provide between 4% and 5% of net revenue in charity care for low-income patients.
340B Explained
This is priceless:
Thanks to 340B, Richmond Community Hospital can buy a vial of Keytruda, a cancer drug, at the discounted price of $3,444… But the hospital charges the private insurer Blue Cross Blue Shield more than seven times that price — $25,425, according to a price list that hospitals are required to publish. That is nearly $22,000 profit on a single vial.
Monday Links
- How are state universities just like hospitals? Unflattering.
- More empirical evidence of their similarity. Also unflattering. (NYT, gated)
- Fraudsters may have stolen $45.6 billion from the nation’s unemployment insurance program during the pandemic.
- The official child poverty rate is 15.3%; but if you count all the transfers programs, the actual poverty rate is about 2%. (WSJ, gated)
- Sitting all day can erase the benefits of a workout.
Death and Dying is a Growth Industry
Wherever baby boomers have gone they’ve strained institutions. Hospitals were filled to the brim with babies in the post WWII years through 1964. Schools were full and more had to be built. Colleges too were filled to capacity with the huge cohort of Americans born between 1946 and 1964. Nowadays approximately 73 million baby boomers are heading for old age. As boomers passed into late middle-age, they created a Golden Age of Rectums resulting in investors buying the practices of gastroenterologists. Investors are also buying nursing homes, which is a growth industry as boomers age. With a huge cohort of boomers slipping into old age, death is becoming a growth industry. Hospice care practices are being acquired by investors, as is presiding over boomers’ death. A new example appeared in Kaiser Health News and Fortune. Death is anything but a dying business as private equity cashes in on the $23 billion funeral home industry.