February 16, 2015

The CEO of Carolinas Healthcare System in Charlotte, a big nonprofit hospital chain, was paid $5 million last year.

The Duke Healthcare CEO made nearly $3 million in 2013.

As nonprofits, both hospitals enjoy millions in tax breaks. They also benefit from a federal program called 340B where they can buy drugs for the poor and uninsured at a deep discount. However, Senator Charles Grassley found both hospitals, especially Duke, mark up the drug prices and sell to insured patients, racking up profits .

The News and Observer said “Hundreds of hospitals nationally, including more than 40 in North Carolina, obtain deep discounts on outpatient drugs under a rapidly growing federal program called 340B. The plan requires drug manufacturers to cut prices to hospitals that treat large numbers of financially needy patients.

Last year, Duke University Hospital purchased $65.8 million in drugs through the program and received $135.5 million in revenue. Duke says it saved $48.3 million buying the drugs through the 340B program. That means the hospital made a profit of $69.7 million instead of $21.4 million if it had not participated in the program.

But 67 percent of Duke patients who received those discount drugs were covered by commercial insurance companies, which often pay hospitals many times over cost for medications. Only 5 percent of the Duke patients were uninsured.”

Only five percent of Duke patients were uninsured? And they want the Legislature to drain state finances by $3 billion for ObamaCare’s Medicaid expansion?

In Charlotte, eleven percent of patients were uninsured and Carolinas Healthcare didn’t provide details on profits from the program. They want to drain away education funds with Medicaid expansion, too

It’s easy to understand Duke’s support for ObamaCare’s Medicaid expansion. They entered a joint venture in 2011 called DLP LLC with for profit hospital chain Lifepoint. Lifepoint says Medicaid expansion is a key profit driver.

Through their joint venture, Duke and Lifepoint are taking over hospitals in Michigan, Pennsylvania and other states, raising the question if North Carolina tax breaks given to nonprofit Duke are somehow used to subsidize out of state takeovers.

Let’s take the idea of nonprofit hospital with a big rock of salt.