You might reasonably say to yourself, “what kind of profit driven corporation would choose to compete in a market with so many non-profit players?” In other words, if we own a corporation formed with the goal of generating profit by offering health services, how could our corporation possibly compete against entities that were formed merely for the benefit of the public, entities that don’t pay tax because they focus on charity? That would be a smart question, but it would be a naive question.
Political or moral tirades are beyond the scope of this blog, but I assure you that there is no such thing as a “Non Profit” hospital. The Mayo Clinic, famous for helping sickly bald children and little old ladies in wheelchairs? They earned nearly $1 Billion over the time period of 2015 and 2016. That’s a profit with nine 0’s on the end of it. (2).
The University of Pittsburgh Medical Center? How about a $616,000,000 net income in just the first six months of 2017! Not a dime of tax, because they work for the community.
What about the generous folks who toil for these Non-Profits, just thinking ceaselessly about the needs of the community’s less fortunate souls? Ronald Peterson, President and CEO of the Johns Hopkins Health Care System, took home $1,600,000 in 2013. As of 2013 his pension was worth $15,400,000. (2) Comforting to know that Mr Peterson will be able to scrape by in retirement, despite dedicating his life to unselfish pursuits.
A capitalist can easily make the argument that these so called “non profits” have done a world of good for America, and humanity in general.
University of Pittsburgh Medical Center has almost single handedly revived the economy of a once moribund rust belt city. Johns Hopkins has been an engine of scientific discovery unrivaled on planet earth. But, charitable delusions aside, money still motivates these folks to get out of bed and make big things happen. That means that our private corporations can compete.