This website uses cookies. Read our Privacy Policy to learn more. Skimming the cream. That's what surgery centers are doing, skimming the cream. What we need is a level playing field. I first heard them in when we opened the Fresno Surgery Center. I heard them again in when we opened our bed unit.
In those days the then California Hospital Association went so far as to argue that surgery centers and surgical hospitals actually increase the cost of medicine by taking profitable cases from not-for-profit hospitals, forcing them to increase their charges.
To the CHA, our innovative, cost-effective, customer service-oriented model was bad for our community even though surgeons loved it, patients loved it, and the clinical results were at least equivalent if not superior to those of traditional hospitals.
In my opinion, our not-for-profit hospitals are misnamed. They are really tax-exempt for-profit entities that enjoy a number of subsidies in exchange for providing a community benefit. They do not pay federal income taxes. They do not pay state income taxes. They do not pay property taxes and they can borrow at interest rates substantially below those available to their for-profit competitors.
Is that a level playing field? In many communities, not-for-profit hospitals have successfully offered substantial discounts in exchange for exclusive HMO contracts. They have used the lower cost of capital granted by their special tax status and market clout of their great size to competitive advantage by excluding for-profit competitors from HMO contracts.
