Wednesday, June 27, 2012


With so many people enduring these difficult economic times since 2008, is Valley Health System a nonprofit that is in much need?

Please keep other nonprofits that are truly struggling in mind when you decide to give financially and to volunteer your time. Several that come to mind would be Boys and Girls Club, C-CAP, United Way, and SAAA. They could use your financial support as well as volunteer time.

Why might you ask? Were you aware that the Winchester Medical Center has tallied a 10-year profit total of $418.6 million from 2000-2010. And, also, that VHS investment and other securities had a market value of $459.2 million at the end of 2010?

Valley Health officials keep publicly promoting the bad debt and charity care that they provide, which is great, but is that not part of the mission of a “not-for-profit” facility, to serve the needy and uninsured? Wonder how come VHS officials never promote their profitability?

The following information was cited from a mid-2000s Not-For-Profit Hospital Class Action Litigation from the state of Illinios.

“Not-for-profit hospitals (NFPs) have operated free from federal and state taxes because they have promised the government that they would operate as a charity provider of health care for the uninsured and that they would not engage in business ‘directly or indirectly, for the benefit of private interests.’ In reality, some NFPs do just the opposite:

Charging their uninsured patients significantly more than those who have insurance, Medicare, or Medicaid.

 Pursuing the poor or uninsured relentlessly by aggressive and humiliating collection techniques.

 Rampantly violating federal and state prohibition against profiteering by ‘private interests,’ through either ‘connected’ board members and/or physicians whose for-profit businesses are formed and subsidized by the ‘tax-free’ organization.

“Certain NFPs, and their subsidiaries who employ the same business model, have amassed and hoarded billions of dollars in cash and marketable securities that otherwise would have been available to provide charity care to those who were contemplated by the tax exemption. Moreover, enormous property and revenues have been isolated from taxation, the effect of which has bestowed upon the NFPs greater liquidity than that possessed by most state and local governments.

“Lawsuits have been filed against NFPs asking the court simply to require the defendants to honor their obligation to provide charity care to those who need it, and to cease the cronyism to favored board members or physicians whose businesses are being unlawfully subsidized by the perverse business practices summarized above.

There is no doubt that VHS has positive impact on the regional area, but are Winchester residents feeling the effect of it not being a better neighbor in paying its real-estate taxes to the City of Winchester?
Just one example: How much more will Winchester residents’ water rates keep increasing?

The community benefit report shows that VHS’s annual community benefit for 2010 was $96.7 million, but that community covers 18 regional counties serving approximate 1.1 million individuals. The 2010 census tells us that approximately 26,000 individuals live in Winchester and 78,000 in Frederick County. Winchester and Frederick County represents approximately 9.5 percent of the regional population served by VHS.

To close, why should residents of Winchester continue to bear the lost of tax base from VHS’ campus while they make millions and millions locally while reinvesting into other regional counties and even out of state? Is this fair to the residents of Winchester?

1 comment:

Anonymous said...

July 2, 2012

In his Open Forum commentary of June 25, Jeff Milburn pleads for us to consider various local charities — the Boys & Girls Club, C-CAP, United Way, and SAAA. All are highly honorable and deserving charities, my personal favorite being United Way, with whom I’ve been directly involved for the last seven years.

He then goes on to lament why, in his convoluted opinion, Winchester residents should continue to, quote: “bear the loss of tax base” from Valley Health System.

Ten-year profit totals are quoted and derided as being excessive. Then he dredges up a single “mid-2000s’ Not-For-Profit Hospital Class Action Litigation from the state of Illinois.” Mid-2000s to me calculates to approximately 2005, a 7-year-old action. There is absolutely no statement as to the outcome of that litigation. I can imagine why.

Next begins a veritable cavalcade of additional innuendo where he alleges the uninsured are charged significantly more than the insured, and the poor are relentlessly pursued and humiliated by collection agencies. I’m sure that the social services folks at VHS have better ways to utilize their time.

Mr. Milburn then proceeds to fire a broadside of blanks by an even more egregious insinuation of “rampantly violating federal and state prohibition by private interests…” and continues implying that “billions are amassed and hoarded” by not-for-profit entities. If this were really the problem he thinks it is, doesn’t one wonder why the federal and state constabularies haven’t already pursued legal remedies against VHS?

I’d also like to remind him of the much-publicized negotiated tax adjustments that occurred just this past fall among the Winchester City Commissioner of the Revenue, City Council, and VHS. The city is satisfied with the agreement on tax rates. I would suggest Mr. Milburn’s entire proposal is thereby rendered null and void as all parties have settled this issue.

Mr. Milburn has even maintained a blog since 2009 where he obsesses about VHS and the way it operates:

I see a health system that has expanded to serve a community far larger than just the City of Winchester. That is precisely why it’s called a regional medical center. These profits have built the new North Tower and greatly expanded the level of services available in Berkeley Springs and Romney, W.Va. There are other special services and projects on the drawing board for Winchester Medical Center in the coming months and years. All these are being paid for by the “profits” of this “Not-For-Profit” system.

What is not mentioned is a “dollar value” on lives saved or prolonged by the quality and quantity of the investments made and proposed by VHS, which I firmly believe far outweigh any paltry tax he may attempt to wring from our regional asset.

What he fails to calculate is the revenue derived from patients and visitors through their use of city amenities, which is, no doubt, considerable. What he does utilize is a very tired collection of statistical information in his equally tired attacks on one of the area’s greatest assets — which, unfortunately for Mr. Milburn, resides in his back yard.

Jim Henry is a resident of Berryville.

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