Monday, December 11, 2023

Bellevue Hospital and Bariatric Surgery

Bellevue_Hospital_front_gate_jehLast week, the New York Times published a story on Bellevue Hospital (the one in New York, not the one Google sometimes seems to prefer in Bellevue, Ohio). The short version is this: Bellevue Hospital has ramped up its bariatric surgeries, which has become a financial boon: it gets reimbursed at least $11,000 per surgery and the surgeons who do bariatric surgery get paid at least in part based on the number of surgeries they perform (in contrast to the other doctors at Bellevue, who get paid a salary). These incentives, the Times says, have encouraged the hospital to perform more bariatric surgeries with less lead time on people less likely to meet the standards for receiving such surgeries.

And I'll note here that the hospital denies the bad implications of the story.

I'll be honest: I'm not entirely sure what to think here. But this story jumped out at me because, like the Times's earlier series on hospitals, it seems to do damage to the idea that some hospitals should be exempt from tax because they do something different than for-profit hospitals. Because if the reporting is right, in spite of the fact that the hospital's profits don't inure to any individual, it nonetheless faced pressure to grow financially, and its employees responded to the same financial incentives that employees of for-profit organizations respond to.

And honestly, Bellevue is a little extra in this regard: not only is it exempt under section 501(c)(3) (since 1981, according to Guidestar), it's also an arm of the state (so exempt under 115). Does that change the pressures it faces? It does have to respond to lawmaker demands, so maybe it faces pressures that non-state nonprofit hospitals don't.

But given how badly they're behaving, it really is time to reexamine whether hospitals should qualify for tax exemption.

Samuel D. Brunson

Photo by Jim.henderson. CC0 1.0 DEED

https://lawprofessors.typepad.com/nonprofit/2023/12/bellevue-hospital-and-bariatric-surgery.html

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