As our organization expands to include workers from different sectors of industry, we are forced to understand and clarify the terrain in which we are organizing in. Below we are posting a new series that will focus on the health care industry and prospects for communist intervention in the Bay Area. Through an analysis of our local region, we wish to draw out the broader implications for organizing the rapidly expanding health care industry. We encourage our readers to comment on the questions raised so as to deepen our understanding of the complexities of workplace organizing in health care!
Non-profit health care is a huge industry. It meets at the junction of the “non-profit industrial complex” and the “health care industrial complex,” but forms a unique hybrid.
To give some scope to this industry, in California, non-profit hospitals account for 61% of total patient days excluding state psychiatric hospitals. Profits are just as large. In 2010 alone, the top two California chains, Kaiser and Sutter Health, together made net income of $2.18 billion.
This led us to two questions: How do nonprofits make profit, and where do the profits go once they’re made?
How does a “non-profit” hospital make profits?
A huge amount of non-profit hospitals’ profits come from state subsidies and benefits. These benefits include being exempt from state and federal income taxes on profits, property taxes, and almost all sales taxes. In return, these hospitals are supposed to offer charity care to those can’t afford it. It’d be reasonable to think that the tax credits given and the charity care returned should balance out so that these institutions are actually non-profiting. The joke of an exchange that exists in reality is shown in the following chart, courtesy of the National Nurses United research group the Institute for Health & Socio-Economic Policy.