Non-Profit Hospitals & Their Employees

Whenever I talk about hospitals which don’t pay taxes because they supposedly do not make a profit, and write off so much money because of bad debt and charity care, I always use air quotes when I use the term, “non-profit.”

The truth is that these entities, while crying poor, are often constantly expanding.  They build multimillion dollar buildings, buy up surrounding property and take it off tax rolls, and pay their executives seven figure salaries.  If that is not making a profit, I would like in on the action.

In the article below by Dr. Arvind Cavale, published in the Rebel MD blog, we see that the so-called charity hospitals have forgotten the old adage that, “Charity begins at home.”


Michael A. Ciampi, M.D.

Non-Profit Hospitals & Their Employees


Almost a year ago, my staff alerted me about a phone call from an angry patient: “Mr. G is refusing his neck ultrasound because he does not want to pay $1100 for it”. I jumped out of my chair and picked up the phone. “Hello, Mr. G, who is charging you $1100 for your neck ultrasound?” Mr. G, who is a thyroid cancer survivor, gets his annual neck ultrasound as a surveillance measure, since we ablated his cancer a few years ago.

I soon found out that his wife is employed by a local hospital, so the family is mandated to use the hospital for all their radiology and laboratory services. Turns out, the hospital bills full retail price for all ancillary services, and employees have a cost-sharing or high-deductible plan. This patient had the latter type of plan, which means that he would owe the entire amount ($1100) if he got this study at the hospital. Eventually, we were able to get this patient his neck ultrasound at a private radiology clinic for $145 and apply that towards his deductible.

Several months later, I decided to perform a Continuous Glucose Monitoring Study on two of my patients on insulin pump therapy. When we received EOB’s after submitting claims, we were advised that these two patients owed us the entire amount, as they had deductibles of up to $2000 because this investigation was conducted outside of their employing hospital. Of course, none of this was apparent when we verified their benefits, the deductible does not apply for office visits and these hospitals don’t offer this investigation.

Finally, two weeks ago, I happened to evaluate a nurse, who had just suffered an acute abdominal episode, for which her gastroenterologist had requested a MRI. Of course, this was not considered “medically necessary” by her employer hospital’s plan. Instead, she was “approved” to get a CT scan at her own hospital for a cost of $600. Again, I was able to get her the MRI for just a few dollars more than the CT scan at a private clinic.

Over the past week I have been thinking hard about why all these valuable employees of “nonprofit” community hospitals were forced to get services and then slammed with huge bills for services provided by their own hospitals. Then, I read the report from Health Affairs, which showed that 7 of 10 most profitable hospitals were nonprofits.

It is now clear to me that the so-called nonprofit hospitals are exerting an exceptional amount of pressure on their employees. Moreover, these hospitals profit from milking their own employees on multiple fronts – paycheck deduction towards premium, forcing employees to use services provided by the hospital, billing full retail price for such services and applying deductible/cost-sharing at the same time.

Profiting on the backs of hard-working employees is not only unethical, but also borders on the edge of illegal. How do we, as a society allow such egregious actions to go unchecked? It is time for all physicians to stand up for our patients (especially fellow caregivers) and protect their ability to receive medical care in the most appropriate and cost-effective manner.  I ask that physicians monitor such activity and help their patients receive necessary healthcare services without being fleeced by their hospital employers. Can we agree on this?

Arvind Cavale MD

About Arvind Cavale MD

Dr. Arvind Cavale is an endocrinologist in private practice in Pennsylvania. You can follow him on Twitter @endodocPA

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