In the News: Power of Nonprofit Hospitals Increasing

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Written by Stephanie Wasek

Thursday, 28 August 2008

The power of nonprofit hospital systems over regional communities has "increased in recent years as their incomes have surged," the Wall Street Journal reports in its Aug. 28 edition. The result, say critics, is the creation of "untaxed local health-care monopolies" that are at least partly responsible for higher healthcare costs.

In the article, the WSJ examines the case of nonprofit Carilion Health System in Roanoke, Va., which merged with another local hospital in 1989. The U.S. Department of Justice, in trying to block the merger, had warned that a monopoly for medical care in the region could be created.

Nearly 20 years on, Carilion Health System is reporting profits of $107 million, tax exemptions of $50 million and charity care costs of $42 million. Further, charges for procedures at the hospital far exceed those at other facilities: "Carilion charges $4,727 for a colonoscopy, four to 10 times what a local endoscopy center charges for the procedure," reports the WSJ. "Carilion bills $1,606 for a neck CT scan, compared with the $675 chargd by a local imaging center."

Read "Nonprofit Hospitals Flex Pricing Power" in full.