Donations from Hospitals: Awfully Generous of Us

***Update and Correction: When I ran this article over breakfast, I was working from the brief article posted at KJAM. An alert reader brought to my attention the fact that the exact text of the article ran first on WNAX.com and included audio from Professor Myers explaining his positions. KJAM offered no attribution on its article indicating WNAX or the press wire services as the source. I apologize for the misattribution. The text below has been revised to reflect WNAX as the source. [CAH, 2007.11.19 11:13]

WNAX pokes a stick in the eyes of our generous and philanthropic health care providers this morning. According to WNAX, USD law professor Mike Myers says donations like Avera Health's $15-million gift to SDSU to renovate Shepard Hall "raise some questions" ["Health System Donations," WNAXRadio.com, 2007.11.19].

...[I]s it appropriate for tax-exempt hospital charities to give basically patient money to the government? ...[I]s it not really an indirect tax on patients? [Myers, audio clip]

With winter coming, let's hope Professor Myers doesn't slip on the ice and end up in the emergency room with a broken leg. Who knows what extra patient tax the Avera folks might slip into his bill!

Seriously, Prof. Myers raises a good point. All those donations are really coming from us, the working folks paying ever higher insurance premiums and hospital bills that seem to be bankrolling a lot more than bandages, crash carts, and nurses' salaries. We may think that these big corporate health donations ease the burden on taxpayers and tuition-payers, but really the costs are just being shifted. When taxes pay for fixing a building at SDSU, the cost falls on taxpayers in general, with maybe a little extra coming from the users of the building, the students who pay tuition and fees. When the health care industry pays for it, the costs still come from the general public, in the form of our health insurance premiums, with a disproportionate amount coming from people who get sick. (Ah, but that fits right in with our sales tax, our video lottery, our property tax, all the ways our state likes to put a greater tax burden on low-income folks.)

Professor Myers suggests that the legislature should "debate the continued non profit status of the large health care systems" [WNAX]. Looking in the mouth of that gift horse may not be terribly polite or wise... but if the money's coming out of our pockets either way, maybe the legislature should consider that money flow. If SDSU needs $15 million to fix Shepard Hall (actually, it needs $48M for the renovation of Shepard and the construction of a new health sciences facility), what's the better way to get that money:

1. take the money out of our pockets as taxes and tuition and hand it straight to SDSU, or
2. take the money out of our pockets as insurance premiums, give the insurer a cut, transfer the money to billing at Avera, watch them make three billing errors that require months to fix (oh, sorry -- that's how Sioux Valley/Sanford worked for us), give the hospital executive directors their cut, then hand the money to SDSU at a big ceremony that promotes the Avera brand?
   

Remember, this writer is a proud SDSU grad who is thrilled that old Shepard will finally get fixed. WNAX and Prof. Myers raise a valid question: are private donations from big hospitals the most efficient way to fund our public institutions?