LAUSR

When the Harvard Business Review published a story in 1987 claiming there was little difference in the uncompensated care provided by for-profit and nonprofit hospitals, The New England Journal of Medicine (NEJM) shot back with a rebuttal, saying the Harvard researchers had gotten it wrong. Not only did the paper fail to separate out charity care and bad debt from the uncompensated care figures but it also ignored significant ways that nonprofit hospitals benefit their communities such as providing medical education and research, subsidizing needed community services such as burn units, and responding to community health needs with activities to improve community health, according to NEJM. This issue was of great interest to the country’s nonprofit tax-exempt hospitals and none more than to Catholic-sponsored hospitals. At the same time, forprofit hospitals were saying that they delivered the same product as nonprofits, only more efficiently because they were business oriented. The powerful US House Committee on Ways and Means, the tax-writing committee of the US House of Representatives, held hearings asking: If there is no difference in the charitable activity of for-profit and nonprofit hospitals, why should nonprofits have special tax status? Catholic hospitals had added concerns. Nuns who “owned” the hospitals were approached by for-profit chains to sell their facilities and use funds for good works. The nuns asked the same question the Ways and Means Committee asked but in another way. The committee asked: Is health care no longer a charitable activity? The nuns asked: Is health care no longer a ministry of the church?