Journal of Sacred Work

"Nonprofit Status
Scrutiny:
Is your hospital
prepared?" – HealthLeaders Magazine

   The above headline appears as both a warning and an invitation in HealthLeaders Magazine. The warning is clear. Non-profit organizations – especially hospitals – are under fire from Congress and the IRS. The invitation is equally clear. The magazine is sponsoring a webscast December 14 to offer help in dealing with the impending threat to that nonprofits may lose their tax exemption.
   Some of us, including many veteran hospital leaders, might say that it’s about time that non-profit hospitals faced-up to their responsibility to be true charities. Excessive preoccupation by many charity leaders with bottom-line performance, branding strategies, and retail style "customer service" programs has continued to blur the line between for profit and non-profit hospitals…

   No one, including me, prefers government interference to responsible independence. The fact that Congress and the IRS are putting nonprofits under increasing scrutiny is tragic for all involved. It’s also an illustration of how much non-profits have been inflicting much of the trouble on themselves.
   Everyone understands that hospitals need to engage in sound business practices. But too many hospitals appear to have crossed the line from sound business practices into a heedless disregard for their true mission of charity. When hospital systems rack up big bottom lines while simultaneously cutting nurse-staffing ratios one has to wonder whether margin has destroyed mission.
   The HealthLeaders Magazine seminar features legal and accounting help from experts. This is fine as far as it goes. But what about counsel on restoring the loving focus of patient care from the countries Mission Officers? What about true charity?
   Clearly, nonprofit hospitals would never have gotten into their current trouble if they had kept mission as their top priority with money serving its proper rule to fund resources to serve the vulnerable. Instead, many nonprofit systems have gone far afield by engaging in a range of expensive investments from sponsoring professional football teams to investing in Hollywood movies.
   There is also the question of CEO salaries. This is a difficult stone for me to cast at anyone since I’ve been the beneficiary of healthy salaries across most of my years as a hospital leader. When does an appropriate salary become too much? i’m not sure of the answer to this but one guideline is the ratio of the CEO’s salary to the salary of a first line nurse. If a nurse’s salary is $40,000, the president of a large, independent hospital can expect to be paid ten times that. What happens if the salary is a million dollars (or 25 times that of a first line nurse.) Such salaries are no longer uncommon but are they appropriate?
   It is the responsibility of hospital boards as much as it is of CEOs to attend to organizational mission. It’s difficult to expect any CEO to turn down an offer of a big salary. It’s primarily up to the board to rein in such excess. More important, every hospital board meeting must include questions about mission performance. CEOs, CNOs and CFOs must be asked to explain how the organization is advancing loving care to the vulnerable. This is not just a question of how many poor people are being treated, but how is care being given. What do survey’s show about how patients and staff are feeling about the delivery of loving care.   
   In other words, independent of government inquiry, the time has come for nonprofit health care leaders to ask: Are we living our mission of true charity?

-Erie Chapman