The Big Story: Senators push IRS to launch nonprofit hospital probe – STAT News
“‘These practices — along with lax federal oversight — have allowed some nonprofit hospitals to avoid providing essential care in the community for those who need it most,’ wrote the senators.”
The ante has been upped
By Isaac Squyres
3-minute read
The latest: a strident, bi-partisan Congressional letter to a regulatory agency. We all saw it coming, right?
Senators Warren and Grassley have been casting a critical eye on healthcare and making waves about tax-exempt hospitals for quite a while. The letter, also signed by Senators Warnock and Cassidy, is a notable escalation.
It’s happening because it’s safe for it to happen. It’s a reflection of the marketplace, where people are becoming more skeptical of traditional healthcare providers – at least in part because of the deliberate, multi-level push of an anti-hospital narrative that is especially critical of not-for-profit providers.
Politicians are political. They most often move when their constituents signal it is safe – or when it is politically advantageous – for them to do so.
And they are moving as the argument between other stakeholders heats up.
“At the center of the tax debate is what counts as community care and charity,” STAT writes, while going on to highlight the argument between a “whatabout” Lown Institute and a toothy AHA.
Are not-for-profits providing enough community benefit to justify their tax relief? What is “community benefit” anyway? Is it the gap between what you’re paid and what it costs to deliver care? The cost of keeping that rural clinic open? How about nursing education, or sponsorship of the grasshopper football team?
The conversation is clouded by differing metrics and definitions. A lack of common standards allows critics a willful ignorance that advances other goals or just reflects a solution-free frustration, a desire to flip to a blank page and start over.
Two points to make here today:
First, the debate is becoming a national talking point but can be ungrounded in real life.
In one of our National Consumer Surveys, we asked adults across the country if their “preferred” hospital was not-for-profit, academic, for-profit or government/VA.
- 34 percent said for-profit
- 17 percent said academic
- 15 percent said not-for-profit
- 5 percent said VA
- And 30 percent were unsure
Our take? Most people have no idea of your tax status. Even if your name starts with “Saint.” The big fancy buildings, polished ad campaigns and the number on the bill drive many to think “for profit.”
If they don’t know the difference, it’s difficult for them to defend you and your service when the time comes.
Add that to this: Our most recent national consumer survey found that – regardless of tax status – more than half of people say that hospitals put profits over patients.
Without having done the work to establish definitions and context, the market (read: voters) is ripe to believe the worst and to consider ill-considered actions proposed by those advancing the profits-over-patients narrative.
Second, don’t confuse brand strength with political strength.
A strong brand or patient preference for a key service line doesn’t necessarily correlate with political strength.
It can be easy to assume that being well-known and the top choice for a cardiac procedure will protect you from criticism. But what if it’s the opposite? What if your strong brand leads to assumptions about what you do and how you do it? Then, if people hear – fairly or unfairly – that your actions or numbers or, simply, definitions of the terms don’t match up with expectations, you have a higher distance to fall.
Our advice in this moment: If you haven’t done it recently – or if your usual brand research doesn’t test this – it’s time to assess your political vulnerability.
- Find out what your “constituents” – your patients and families and community members – know about who you are as an organization and what they expect of you. Do they know what your business structure is?
- Do they understand the difference between for-profit and not-for-profit systems?
- Do they care about the difference?
- Do they think your organization prioritizes patients over profits?
- Do they think your organization is fulfilling its charitable mission and giving back to the community in ways they expect?
- Are they willing to go to bat for you in a fight?
It’s only with that intelligence that you can confidently shift to offense. To build an effort – a kind of campaign – that defines your position, tells your story and sets the table for the conversation that is coming your way.
You and we know there’s more to come. Another study will be released, another bill dropped, another ad run, another breathless letter written, another story in Becker’s that you’ll circulate to your leadership team and your board. Drip, drip, drip.
When will you move from irritation to action? From defense to offense? Like most diagnoses, the sooner you act, the better the outcome. Don’t wait for some key moment of critical mass to act in defense of your organization and on behalf of the patients you serve. Start by asking.
Contributors: David Jarrard, David Shifrin, Emme Baxter
Image Credit: Shannon Threadgill
