By Ron Galloway
Phoebe Putney Hospital is the center of a mini-controversy these days, stocked in part by a documentary featuring two Albany residents who had some issues with the hospital. Let me explain why I think the whole fabricated issue is meaningless.
My name is Ron Galloway. I’m a Georgia filmmaker, and 3 years ago I directed the documentary “Why Wal-Mart Works & Why That Makes Some People Crazy.” The film received global attention at the time due to the fact that unions and other interest groups were protesting Wal-Mart at the time, and my film presented arguments which in essence defended Wal-Mart.
So this issue with Phoebe Putney is like déjà vu all over again to me. People are attacking an institution they don’t understand, with a film that has a clear agenda.
By the way, I have seen the documentary about Phoebe Putney. My reaction? It’s well lit.
The majority of healthcare delivered today is through non-profit hospitals. Here’s where some people get their facts mixed up. Just because a hospital is “non-profit” does not mean it doesn’t pay taxes. It does. Phoebe Putney has thousands of employees. Guess what? Those folks pay taxes with wages from Phoebe. Phoebe Putney purchases goods and services from hundreds of businesses in the Albany area. And that generates more taxes. Phoebe Putney’s employees own hundreds of homes in the area, which generates — you got it — property taxes.
If Phoebe Putney did not exist, none of those taxes would be paid at all. The average non-profit hospital has a negative 2-percent profit margin. So the argument itself is moot: most hospitals have no profit to tax at all.
The anti-Phoebe film claims executives flew on jets to exotic places. So what? That generated jobs for the airport and pilots; therefore, more taxes.
Offshore accounts? Thousands of hospitals have captive insurance companies, which were created “off shore” because many state laws in the U.S., including Georgia, didn’t allow for the creation of these captives until recently. Most successful hospital systems have captive insurance companies to help hold down the high cost of malpractice insurance. The documentary film got it wrong. Phoebe never kept any money in offshore accounts. The dollars were all safe and sound in the USA, and Phoebe didn’t create a captive insurance company to dodge paying U.S. taxes, because the hospital is tax-exempt.
Running a hospital today is a financial juggling act. How would you like to be paid 60 cents for every dollar you billed? That’s the state of reimbursement to hospitals today, and hospital executives need every tool they can find to keep things running. The average U.S. hospital has 120 days’ operating expenses in the bank. Phoebe has nearly a year’s worth. Why? They are well run, that’s why.
The anti-Phoebe film claims, laughably, that non-profit hospitals are holding $3 trillion in cash and investments. They do this by extrapolating Phoebe’s financial position, which is healthy, to the rest of the nation. Most hospitals are not as well run as Phoebe. $3 trillion is more than our entire nation spends on healthcare each year.
But $3 trillion does attract lawyers — which is exactly what is happening here. Having plowed through other industries, trial lawyers see a new cash cow in suing non-profit hospitals. Lawyers are stirring the pot to get at this imaginary pile of money, aided by unions and other advocacy groups, who want to unionize the hospital workers.
Here’s the point everyone seems to be missing: If a patient turned up at Phoebe Putney, they got treated. They did not get turned away. Sure, they may have gotten a bill afterwards, but guess what, the hospital treated them first and worried about the money later.
I have no dog in this hunt. But I do have friends that work at Phoebe, and the way some people are treating them makes me crazy. I have to say something.
It’s easy to make a documentary film. Anyone can do it. I know that from experience. What’s not easy is to take care of 300,000 patients every year, which is what Phoebe Putney does. Day in, day out, Phoebe takes care of your family, friends, and neighbors.
Remember that when people with an agenda try to tear them down.
Ron Galloway is a frequent public speaker whose presentations include a variety of business topics, notably regarding Wal-Mart and innovations in business technology. He is the lone conservative columnist on The Huffington Post.