A couple weeks ago we were shocked by the Time magazine article and its revelations on the healthcare industry. There was special emphasis on the nonprofit hospitals that paid their CEOs millions while squeezing their patients.  The article talked about the huge markups hospital took on products and services and how there was a wide discrepancy between what they charged Medicare and others.  It was both informative and embarrassing.  This article that was covered everywhere, because of its shock value, will have huge ramifications.  Perhaps most interesting was how little response came from the hospitals and others in the healthcare industry to counter the claims made in the article.

One of the easiest targets based on the article would be the tax advantages given to nonprofit hospitals. It is very hard for local governments to continue to give huge breaks to what most recognize as perhaps the most profitable enterprises in their communities.  Hospitals have traditionally been viewed as community institutions that helped the poor and had open doors to anyone who needed care.  Think of all the hospitals owned and run by women religious orders like the Sisters of Mercy and Daughters of Charity.  Things have obviously changed.  The part of the article where chemotherapy was withheld until a patient’s co-pay check cleared the bank at one of our nation’s most recognized cancer centers drives this point home.

I am not against hospitals making money as they employ tons of people and do some very good things for our communities.  The issue is whether they should be exempt from paying taxes.  In order to qualify there is a percent of revenue that must go to charity care.  A couple years ago I attended a Chicago City Council meeting, a treat in itself, where this issue was discussed.  Workers, accusing the hospitals of unfair labor practices, pointed out that these tax advances were no longer deserved.  One of the key points of debate centered around how charity care should be defined.  In this case, hospitals were saying that all unpaid bills should be considered charity, but they had a hard time justifying this to be charity while they were garnishing wages and putting people into bankruptcy.

For another real world example take a look at this piece from Pittsburgh where last week the city began to go after their medical center.  Perhaps it is time we either decide to treat our hospitals like the big businesses they really are or go the other way and force them to provide the charity care necessary to take the burden off the rest of the community.  But it is all about image, right?  Once you look vulnerable it is easy to get attacked.

Those of us in the pharmaceutical industry know this all too well.  We see constant ads from lawyers trying to solicit claims from vulnerable patients.  Whistleblower suits, whether valid or not, are headlines in newspapers.  Drug recalls are made to look much worse than they often are.  New drugs all seem to be discovered by the government and the only news we seem to get is about how many people the industry lays off, with little mention of how many we employ.  Our high prices and price increases are publicized but nothing is said about our aid to those who can’t afford to pay for drugs.  The real issue is that these stories hurt our image and make us more and more vulnerable as an industry.  We need to fight back and really publicize all the good we do, not with some quirky message from PhRMA, but with some world class PR with real life stories of how we help the world.