Sat, Dec 28, 2013 - Page 3 News List

Watchdog takes aim at nonprofit hospitals

By Alison Hsiao  /  Staff reporter

Eighty percent of the 40 hospitals that are marked as nonprofit have showed surpluses in a recent report, but only 18 of them had to pay extra taxes, the Taiwan Healthcare Reform Foundation said, adding that half a dozen slashed their personnel expenses.

The foundation called yesterday for the establishment of a public-interest supervisory board to monitor the hospitals’ accounting.

Based on a 2011 financial report of medical corporations recently made public by the Ministry of Health and Welfare, the foundation said 32 of the 40 nonprofit hospital corporations showed surpluses, with their total earnings amounting to NT$23.3 billion (US$777 million), but only 18 paid extra taxes, and seven had growing after-tax earnings and medical affairs income, but decreasing staff costs.

As nonprofit corporations are granted tax deductions for their establishment and operation, and with close to 90 percent of their medical income coming from National Health Insurance funds, these hospitals are no longer the property of the corporations who donated and supported their establishment, foundation chairwoman Liu Mei-chun (劉梅君) said.

It is not that these hospitals are not allowed to have a surplus, Liu said, but that they need to pour the benefits into public-interest activities or improve the welfare of and support provided to their staff.

“The claim made by some hospitals that they are short of money to increase their medical manpower strains credulity,” Liu said, adding that Chang Gung Memorial Hospital — with the highest net income of NT$17.4 billion — and Cathay General Hospital — with NT$281 million — were among the top 10 most profitable hospital corporations, but they are also listed as two of seven hospitals that reduced their personnel expenses.

The foundation also found that five of the 10 most profitable hospitals were enterprise-affiliated, while religiously affiliated or middle and small-sized institutions were more likely to run into deficits.

And while the enterprise-affiliated hospitals earned the most, their average donations to charity was lower than that from religiously-affiliated ones, matching only general hospitals have have limited net income, the foundation said.

Nonprofit hospital corporations reported NT$2.3 billion in public-interest expenses, but there is no supervision for nor transparency to that spending, the foundation said.

The foundation said that the ministry should establish an appointed supervisor accountable to the public, who is responsible for ensuring the proper use of each nonprofit hospital’s earnings.

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