CPMC provides little charity care despite huge profits

CPMC's proposed Cathedral Hill project, up for approval next year, was the subject of our Nov. 23, 2010 cover story.
John Ueland

A new study has found that the California Pacific Medical Center (CPMC), an affiliate of nonprofit Sutter Health, provides far less charity care per paying patient than other hospitals in San Francisco even as it makes by far the most in profits, highlighting an issue that many city officials have raised as CPMC seeks permission to build a high-end new hospital on Cathedral Hill.

The study by UC Hastings College of Law is called “Profits & Patients: the Financial Strength and Charitable Contributions of San Francisco Hospitals,” and the Guardian reviewed an advance copy before its official release this Thursday. It compares CPMC's hospitals with St. Francis Memorial Hospital, St. Mary’s Medical Center (both are Catholic Healthcare West facilities), and Chinese Hospital.

“Mainly due to Sutter Health’s plan to alter its current hospital structure within San Francisco, the provision of community health benefits by San Francisco hospitals is now a major issue before the Planning Commission and Board of Supervisors,” the report reads.

Even before that project, CPMC/Sutter is the dominant health provider in town, and by far the most profitable. Between 2006-2010, the report says the company made $743.9 million in profits from its San Francisco operations, compared to St. Mary's $22.6 million in profits and the $14.8 million loss by St. Francis.

CPMC runs four of the largest hospitals in the city – St. Luke's Hospital and CPMC's Davies, California, and Pacific campuses – behind only San Francisco General Hospital, the city-run facility that does by far the most charity care. But while the other hospitals in the study are smaller, with much less staffed bed counts, they still manage to see the same or more charity care patients than CPMC.

For example, from the report, Saint Francis has 150 staffed beds and sees approximately 31 charity care patients per bed per year. CPMC has 514 staffed beds and sees only 14 patients per bed per year. “In 2010, CPMC’s three oldest campuses (Davies, California, and Pacific campuses) saw charity care patients at a patients per bed rate less than half that of Saint Francis, despite being more than 3 times the size of Saint Francis and having significantly greater financial stability,” read the report.

St. Mary’s and Chinese Hospital also see approximately 13 charity care patients per year per staffed bed, and their staffed beds are 160 for St. Mary’s and 31 for Chinese Hospital. If CPMC has so many more staffed beds, why aren’t their charity counts any higher than a hospital with only 31 beds to their 514 beds?

Hastings Professor Mark Aaronson, who put together the study, said that charity care is supposed to be at least 3 percent, the minimum expectation for the San Francisco Board of Supervisors. CPMC’s is closer to 1 percent.

Why is it so low? If you ask CPMC, it’s not. “It depends on how you calculate it,” said CPMC spokesperson Kevin McCormack. “As a dollar amount, we give more in charity care than any other hospital expect for General Hospital.”

Well, obviously. CPMC is a massive conglomerate that has four campuses to maintain and put money into to have the beds and staff available. Having so much more space than any other hospital, they would have to put in more as a dollar amount just to sustain those campuses.

Given that CPMC is a non-profit organization, where does that extra few tens of millions of dollars go? Well, some of it goes to hire the huge team of consultants and lobbyists who are now trying to win approval for the Cathedral Hill project. But McCormack said it also gets absorbed into CPMC operations.

“It goes back into the system itself,” said McCormack. “It goes back into the hospital, into salaries, building new facilities, repairing old ones.”

Even so, the report shows CPMC to be in a different category than other hospitals when it comes to supporting San Francisco's full population. It also found that the profits extracted from San Francisco's hospital subsidize the whole chain, a situation that will only become more pronounced as it builds a hospital at Cathedral Hill that seeks to draw patients from around the country.

“CPMC-St. Luke’s is not only the most profitable hospital in San Francisco, but it is also the most profitable hospital in the Sutter Health statewide network. Out of twenty-one hospital groups within the Sutter Health network, CPMC/St.Luke’s brought in nearly one quarter of Sutter Health’s average net income over the last five years,” the report reads.

The report was prepared for the Good Neighbor Coalition, Coalition for Health Planning -- San Francisco, and Jobs with Justice. The official public release of “Profits & Patients” will be at 11 am on Thursday, Dec. 8, at the UC Hastings College of the Law, 100 McAllister St., Room 300, San Francisco.

Steven T. Jones contributed to this report.


Isn't CPMC being asked to pay a billion some odd dollars to affordable housing, transit and community programs in exchange for their new development projects?

Posted by Guest on Dec. 06, 2011 @ 7:31 pm

They should be paying 40 billion dollars! The van ness facility will only be for wealthy out of towners.

Posted by Guest on Dec. 06, 2011 @ 9:24 pm

By wealthy, you mean people who actually have insurance and pay their medical bills?

Posted by Guest on Dec. 07, 2011 @ 11:55 am

never commit crime or draw on city services or welfare.

Why would we want people like that? We're trying to build a city for losers here.

Posted by Guest on Dec. 07, 2011 @ 12:12 pm

and government shakes down corporations - it's all a giant shake down.

Unfortunately none of it shakes down to the average person.

Posted by Guest on Dec. 06, 2011 @ 9:30 pm

While it's true that corporate money doesn't shake down to the average person, that's not true with local government, which has a core mission to provide services and infrastructure for the average person.

Posted by steven on Dec. 06, 2011 @ 10:20 pm

Not the average citizen. Corporate shake downs profit shareholders and CEOs - not the average citizen. They're both shake downs for special interests. No one's shaking down either for the benefit of the middle class.

It's not accurate to suggest that city government provides services to the average person - most people feel estranged from city government due to its focus on the poor, undocumented, homeless and drug addicts and aiming services towards them. A focus on the dwindling middle class in this city would be welcome for many of us.

Like President Obama gave his speech on today. The dwindling middle class in San Francisco is the crisis.

Posted by Guest on Dec. 06, 2011 @ 11:08 pm

So you don't use the roads or the sewer or water systems? Parks aren't really your thing? You think San Francisco would function without a public transit system? I hope you're never the victim of a fire or crime. I know the anti-government attitude in some people is fairly unshakeable, but you're delusional if you really think that local government exists mostly to serve the poor or the nonprofits that deliver them services, which is a small part of the city's budget. But even then, are you really so heartless that you want to live in a society that completely neglects the poor? If so, you'll be needing those police services even more than you think.

Posted by steven on Dec. 07, 2011 @ 12:10 am

from public safety (which is a vital and legitimate role of local government) most of the rest of what the City provides is optional, or at least could be done better and cheaper by the private sector.

Street repairs and local transit could certainly be private and is in some cities.

Sewer and water is private in most cities just like other utilities.

That just leaves the poverty pimps and various other "social engineering" services and subsidies" that many feel should be given over to chairities and volunteers to help fix the massive budget deficit.

The focus should be on public safety, and alternte options considered for all other services.

Posted by Guest on Dec. 07, 2011 @ 6:25 am

That's just crazy. There are no major U.S. cities that I know of that have private water, or fully private transit. It doesn't work. You want private parks? You want private street repairs? Who's going to pay for it?

Posted by tim on Dec. 07, 2011 @ 10:55 am

It's more a matter of who is cheaper and more efficient. Even prisons are often run privately. While there are several quoted water companies providing water services to localities.

Posted by Guest on Dec. 07, 2011 @ 3:28 pm

So you want to privatize everything? That's just nuts and we're just not ceding San Francisco to those sorts of right-wing ideologues. Contrary to your claim, most big cities don't have private water and sewer systems, nor are the transportation and other basic services private. There are things that we need government for, things few of us would trust the private sector to do well and honestly. In addition to the things I already mentioned, do you really want to get rid of the building and health inspectors and just trust capitalists to keep us all safe? And when they don't, wouldn't it be nice to have a court system to hold them accountable? 

Honestly, I just don't understand why you believe the private sector is somehow inherently better than the public sector. Our health care system is private and we have some of the highest rates of infant mortality and other bad outcomes in the industrialized world. Sure, it's great if you're rich, as with much of what corporations offer, but not so good for the vast majority of citizens. Why you conservatives seem so intent on dragging this country back into Third World status is really a mystery to me, unless it's the cheap labor and aggressive police state that you're seeking, which doesn't sound so far off from the truth to me.

Personally, I prefer civilized, modern society, in which we feel some obligation to one another and the government plays a role in making sure people are playing by the rules and that nobody faces unnecessary suffering or hardship. You know, life, liberty, and the pursuit of happiness. Remember that concept?

Posted by steven on Dec. 07, 2011 @ 2:55 pm

or routine street repairs. And I definitely do not want privatized mass transit. The city already outsources major construction projects, which is fine with me.

The profit motive is not always the single most important factor, especially when considering city services. I have a major problem with the city selling off its assets to private equity groups, like Chicago has done with its parking meters. The end result? The company which owns them extended paid parking to 24 hours and jacked up the prices 10x what they were before.

Posted by Guest on Dec. 07, 2011 @ 3:07 pm

What matters is which is cheaper. If the private sector does it cheaper, then we have an affirmative fiduciary responsibility to outsource.

The one exception is fire and police. I don't believe they can be privatized. But for everything else, I can point you to a city where the private sector does it instead of overpaid municipal workers.

Posted by Guest on Dec. 07, 2011 @ 3:30 pm

Because as a resident, homeowner and taxpayer here I have a say in what the city does and to whom it sells its assets. And you err when you say "WE have an ultimate fiduciary responsibility." Wrong - YOU feel the city has an ultimate fiduciary responsibility but not everyone else does and you don't set city policy. And SF voters aren't going to vote to sell of city assets at fire sale prices to private equity groups like other cities have done.

It was me who originally wrote the comment about city shakedowns vs. corporate shakedowns and now your extremism is making me understand how gently expressed concerns about government can be twisted to suit a radically pro-corporate agenda - which was never my intent.

Posted by Guest on Dec. 07, 2011 @ 3:49 pm

That's the limit of your power.

You have private electricity, gas, phone and trash. Why is water any different?

Posted by Guest on Dec. 07, 2011 @ 5:56 pm

water system which provides H2O in SF - which supplies large quantities of clean water at a relatively cheap price. More than a hundred years of public investment have gone into building a superb water supply system for SF. There is ONE set of pipes, ONE series of reservoirs. A private entity over these public assets, operating on the basis of profit, is a monopoly much like PGE - you take their service at the price they want to supply it or you disconnect from the grid. At least the city operates the water supply system for the good of the public - the public it serves, NOT shareholders and CEOs ensconced some place far away.

Water is a public good - not a private good.

Posted by Guest on Dec. 07, 2011 @ 6:24 pm

doesn't make any difference who provides it. But I'd always trust a private supplier over a bunch of bureaucrats.

Posted by Guest on Dec. 08, 2011 @ 6:36 am

The "Penny Medical" is quite popular in California and New York. For example it offers the low income health plan. Also offers health insurance for individual with pre-exisiting conditions.

Posted by DevinLopez on Dec. 07, 2011 @ 2:36 am

They don't have to give anything, so why is giving less than some others a problem?

Posted by Guest on Dec. 07, 2011 @ 6:04 am

No, hospital corporations -- particularly nonprofits like CPMC -- have always been expected to provide charity care. And since the Charity Care and Discount Payment Act of 2006 (AB 774), California hospitals have been required to explicitly state and advertise their policies for providing charity and discounted payments.

But the broader issue is also important, and one we've forgotten. Corporations are allowed to operate under public charters, ostensibly because they provide some public good. Those charters could and should be revoked (although they rarely are) when corporations act contrary to the public good. Or, in this case, we could simply deny Sutter/CPMC the approval and permits they seek to build a hospital that caters to the rich unless they agree in writing to increase their charity care. Why should we allow this out-of-town corporation, which uses deceptive claims to nonprofit status to avoid paying taxes, to extract ever more tens of millions of dollars from our community while it refuses to care for our residents and instead sticks city taxpayers with that bill?

It's time to start making demands on these corporations instead of begging for their charity.

Posted by steven on Dec. 07, 2011 @ 3:17 pm

that it is obligatory. If it's mandatory then it's not charity, it's taxation.

So the amount of charity that any private person or group donates is entirely optional and discretionary.

Punishing an entity because they elect not to do something voluntarily is repugnant. and I wouldn't blame them if they built their new hospital just outside the city limits, just like so many businesses and stores do - because they are sick of over-regulation, high taxes and the petty politics of envy.

Posted by Guest on Dec. 07, 2011 @ 3:35 pm

Guest, corporate hospital chains who are tax exempt are expected to provide charity care, and 3% seems quiet modest. Otherwise, why would any corporation pay taxes? Better to claim not-for-profit, pay no taxes, and contribute next to nothing in charity care. I am the 99% Guest, and your 'logic' sounds too much like an argument from the top wealthiest 1%.

Posted by CPMC Registered Nurse Guest on Dec. 07, 2011 @ 5:24 pm

Charity is voluntary, otherwise it is called something else.

If you want to raise taxes on corporations, then put that on the ballot, and watch it lose.

Posted by Guest on Dec. 07, 2011 @ 5:58 pm

As I wrote earlier, corporate hospital chains who are tax exempt are expected to provide charity care, and 3% seems quiet modest. Otherwise, why would any corporation pay taxes? Better to claim not-for-profit, pay no taxes, and contribute next to nothing in charity care. I am the 99%, and some of the 'logic' I read here sounds too much like an argument from the top wealthiest 1%.

Posted by CPMC Registered Nurse Guest on Dec. 07, 2011 @ 5:26 pm

And remember that a non-profit cannot deduct charity from it's taxes.

It's none of your or my business how much or how little they give to charity.

Moreover, I'm sure some patients don't pay their hospital bills, which is simply charity in a different form.

Posted by Guest on Dec. 08, 2011 @ 6:38 am

Actually bad debt is not considered charity. Let us put it this way. If CPMC where not a not-for-profit, and paid taxes like every other for profit in SF the tax gains for SF alone would outstrip the meager 3%. And really, you are confusing donation with charity obligation.

Posted by GuestCPMC RN on Dec. 10, 2011 @ 8:04 pm

.... it's pretty easy to obfuscate how much goes to charity. In 2007 I received excellent care at CPMC Pacific, that saw me with two emergency room visits, the second of which resulted in admitting me to the hospital for surgery. Two endoscopic procedures, and a surgery later, the bill for four nights totaled over $120,000.00, including one line-item $3,800 charge for 'obstetrics/other', which I found odd since I am a male patient.

To be fair, that last charge was likely for an ultrasound examination that lasted about fifteen minutes. What this medical odyssey further revealed was how in-cahoots these billing practices extend to health insurance costs. My Blue Shield individual policy marketed under the moniker 'Spectrum 1500' was a plan that would equate to my outlay of three times that, or $4,500 out of pocket, since 1500 refers to deductible, and another 1500 for co-pay, and another 1500 for co-insurance before all costs were covered.

I couldn't help but feel that the numbers on the invoices are inflated on purpose, to rack up huge billing dollars. Whether the hospital gives 1% or 3% of their care to charity, these percentages seem miniscule compared to the 97% or 99% that goes towards net revenue and ultimately profits.

It was no coincidence that I was processed into the E/R ahead of the only other patient in the waiting room, at 4am when I arrived. He was obviously homeless and suffering, too. I had insurance, and he likely didn't. They didn't seem in any rush to see him.

Posted by Guest on Dec. 07, 2011 @ 10:35 pm

For an unbiased report check out San Francisco Hospitals Charity Care Reprort FY2010, produced by the San Francisco Department of Public Health.


Posted by Guest on Dec. 08, 2011 @ 10:21 am

If that makes you happy... But where do you think this "biased" report got its facts? You guessed it, the SF Charity Care Report.

Posted by Guest on Dec. 08, 2011 @ 1:39 pm

Also from this author

  • All backed up

    City begins to rectify chronic problems with overflowing sewers after settling a lawsuit

  • Lack of charity

    Report says CPMC is extracting huge profits from San Francisco but doing little charity care