Report: State?s Nonprofit Hospitals are Flush with Cash

Non-profit hospitals in Wisconsin are turning a profit – making them non-profit in the way International Houses of Pancakes are International.  Except, at least, IHOP is in Canada.

According to a new report, Wisconsin’s nonprofit hospitals accrued a combined $1 billion in total margins for 2005, the most recent year in which figures are available. The report, compiled by the Wisconsin Hospital Association, defines total margins as “all revenues minus all expenses.”

State Sen. Russ Decker (D-Weston) said the margins are proof that Wisconsin’s health care providers are profiting while the number of uninsured people increases in the state.

“I want to show what’s going on,” Decker said in a statement reported on in the Wisconsin Small Business Times. “Every year, health care (providers) continue to charge more and make more. To have nonprofit hospitals have $1 billion in profits is excessive.”

Bill Bazan, vice president of the metropolitan Milwaukee region for the Wisconsin Hospital Association Inc., tells a different story.  He says the total margins between hospitals’ revenues and expenses in the WHA report cited by Decker are misleading.

“Every year, Sen. Decker issues a similar press release, using erroneous facts and figures to criticize the so-called profits (of hospital systems) without a full understanding of what they’re all about,” Bazan said. “Sen. Decker refers to more than $1 billion in profits, but more than half of those numbers are from investment income, philanthropic foundations, gift shop sales and other fund-raisers. It’s important to know that two and one-half cents of every dollar in health care premiums is attributed to patient care. And that is hardly what is causing the increases in health care (costs) in southeastern Wisconsin.”

The $1 billion positive margin will be used, the hospital suggests, to reinvest in infrastructure, as well as to take care of lower-income patients.  Which is what the non-profit is supposed to do to keep its non-profit status.

“We like to think of all of that as money to reinvest in our hospitals and communities,” Julie Swiderski, vice president of government and community relations, said in an interview with the Small Business Times. “We exist to serve and benefit communities in that way. We give care to anyone that comes to us. We’re in the business of taking care of people. No person is denied access based on their ability to pay.”