Are Nonprofit Hospitals Truly Nonprofit?

A new study showed that nonprofit hospitals generate the most profit.

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Seven of the top ten most profitable hospitals in the U.S. were nonprofits.

Which hospitals topped the list?

  1. Gunderson Lutheran Medical Center,
  2. Sutter Medical Center, Sacramento,
  3. Stanford Hospital and Clinics,
  4. Norton Hospital,
  5. Hospital of the University of Pennsylvania,
  6. Sacred Heart Medical Center, and
  7. Carle Foundation Hospital.

Gunderson Lutheran Medical Center topped the list for profits and nonprofits combined with their profit from patient care services coming in at $302,500,000 in 2013.

Second on the list was Sutter Medical Center with a profit from patient care services of $271,900,000 in 2013.

Why are nonprofits making the most profits?

Most hospitals actually lose money, however there are a few that are very profitable.

Many nonprofits have established monopolies in their communities. This allows the nonprofits to increase prices charged to private insurers. This is especially true for hospitals that belong to a larger health system.

Some experts believe that incentives should be developed to allow all hospitals to make a fair profit, while prices are kept at a more reasonable rate.

As expected, the hospitals with the highest price markups have the largest profits.

Further, nonprofit hospitals benefit greatly from both state and federal tax breaks. The value of these breaks have doubled over the past decade.

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