Cooperation of Coporate and Non-Profit Hospitals

I’d never realized that U.S. hospitals, even non-profit ones, are required to engage in charity work to receive tax exemption. According to the New York Times, members of the American Hospital Association are uniting to oppose the Senate on setting “a minimum annual level of charitable care” for tax exemption. I agreed with Senator Grassley that hospitals must step up charity work in return for this financial advantage. I agreed until I saw the price-tag on the tax exemptions the hospitals receive annually: $6 billion.
In theory, this government-mediated mixing of corporate business and social charity is beneficial for the American healthcare system. In fact, both the NY Times and J.A. Alexander, et al. articles point out that the lines between for-profit and non-profit hospitals are getting blurred. However, I wonder if a more effective move, especially in the face of current healthcare fund deficits, would be to remove this incentive to marry business and social work. For example, what if corporately-run hospitals are fully taxed, and the $6 billion used more directly to care for the uninsured through designated non-profits?
Naturally, such a drastic separation of private and public institutions would drive deeper the chasm between those well-served and neglected by the medical systems. Therefore, I wonder if middle ground would be forming partnerships between corporate and non-profit hospitals. The institutions would be run by two autonomous governing boards. A personally surprising point from the J.A. Alexander, et al. article was the comparison of the governing board types of philanthropic and corporate institutions. Ranging from goals to the numbers and types of leaders represented, the two seem drastically different. It is no wonder that non-profits’ attempts to house a charity under its corporate-minded board often results in excessive red tape. The government could, for example, be in charge of mediating the transfer of a set proportion of taxes from each corporation to its corresponding sister non-profit hospital.
The government should require corporate hospitals to do less of the direct charity work that they are not structurally set to do proficiently. Instead it should play the middle-man, exchanging partial tax exemption for funds that would transfer to non-profit hospitals that could contribute to the nation’s task of providing healthcare for the underserved classes.