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Tuesday, Oct 4, 2022

Philanthropy the Right R/x for Some Local Hospitals

Benjamin Franklin was a diplomat, inventor, author, physicist, politician and printer. But what he was most of all was wise. Among the wisest things he ever said was that “an investment in knowledge always pays the best interest.”

Now more than ever we should take this wisdom to heart. If we do we will quickly discover that nowhere is the investment in knowledge put to better use than in one of Los Angeles County’s 57 local community hospitals. Never has the need for such investment been greater.

Just like many other businesses here in Los Angeles, community hospitals find themselves sandwiched between a limping economy and a troublesome budget deficit. Expansion of MediCal under the Affordable Care Act will test these hospitals on how to maintain the highest possible levels of quality and patient experience while getting paid only a portion of what it costs to deliver care. The 2014 launch of Covered California, as well as other health insurance exchanges, will likely mean reductions in reimbursement from both commercial and public plans. In addition, as part of Washington’s attempt to reach a budget compromise, hospitals will no doubt notice an incision in what they receive for treating the growing number of Medicare patients.

There are three ways hospitals can bridge this financial divide. The first option is simply to eliminate or greatly reduce services offered. Such actions would strand communities without the services they need while leaving hospitals without the footing to support their tax-exempt entities.

The second option is to squeeze more from the private-pay patient. But there is very little “retail” left in health care, and L.A.-area employers have no more money to give into the system.

With one option unacceptable and one unachievable, hospitals must turn to the third route to overcome what is fast becoming a Grand Canyon of a gap: philanthropy.

Supporting a local community hospital is a good investment now and for the future as dollars raised through philanthropy provide the stabilizing force and financial flexibility local hospitals need to serve Los Angeles in ways that make a powerful difference.

At Huntington Memorial Hospital, for example, philanthropic dollars allowed us to open our six-story West Tower in 2008 and it is allowing us today to enhance the size and capabilities of the San Gabriel Valley’s only trauma center.

Philanthropy also provides the funding needed to deliver care that would otherwise be missing from our community – such as Level III neonatal intensive care and our Senior Care Network – and to offer many outreach programs that appeal to the wonderful diversity of our community. The generosity of donors helps fund our graduate medical education program; brings first-class equipment into our cancer, heart and neurosciences centers; and provides the kind of environment where the best and the brightest want to work. There are examples like this throughout Southern California where local philanthropic investments are paying very real dividends to the local community hospitals.

Scientific research

Thinking more broadly, a 2009 study from the Cato Institute reported that scientific research conducted in the United States contributed to at least 20 of the top 27 diagnostic and therapeutic advances of the last 40 years. Much of that takes place right here in California. But it takes dollars to keep innovation going and many fear that the new taxes and regulations being imposed under health care reform may diminish America’s strength as the undisputed world leader when it comes to medical breakthroughs and triumphs. The U.S. health care system has plenty to be proud of. But it takes private investment to make sure that we protect that.

While the need is undeniable, financial uncertainties have clouded the horizon. Charities, non-profits and private foundations worry that new limits on tax deductions for higher earners (part of the new tax law effective New Year’s Day) may hurt donations at a time when charitable giving is starting to rebound from the depths of the recession. As Congress promises to overhaul the tax code even further, there is no telling where this might lead or what chilling effect this may have.

Truth be told, tax incentives have never been the sole reason individuals and L.A.’s businesses have supported local hospitals. Some do so to say thank you for providing care and compassion when they themselves or a loved one was in need. Some are driven by a moral compass that steers them toward wanting to do good for those less fortunate. Some might want to protect the safe harbor of local health care and help assure that it will be there in the future. Some want to leave a legacy while others merely want to live out the true meaning of the word “community.”

Then there are those who are simply students of history and agree with that wise gentleman from Philadelphia that an investment in knowledge always pays the best interest.

Jane Haderlein is senior vice president at Huntington Memorial Hospital in Pasadena.


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