What it Means to be Nonprofit—and How it Helps Intermountain Serve our Communities

By Charles W Sorenson MD

​The rapidly changing national healthcare environment has raised many good questions in people’s mind about how healthcare will look in the future.​​

I Med Tower
One question I’m frequently asked here at home and elsewhere in the country is “How will health reform, with its promise of health insurance for many more people, affect the future of nonprofit health systems like Intermountain?” The question is an important one. The answer is somewhat involved and seems to surprise many people.

First, regarding health reform, we need to remember that not everyone will qualify for employer-based or publicly financed health insurance. The healthcare reform act of 2010 did not provide guaranteed coverage for those who are not US citizens, nor does it effectively require coverage for many who do not file a tax return (as this is the mechanism used to document coverage). What does that mean for us? It means that despite lack of funding sources, health systems like ours will still have a legal and ethical obligation to provide appropriate clinical care for those without coverage. We’ll also be providing care for those citizens who may fall through gaps in coverage as they transition between Medicaid and Federally subsidized programs.(see “Some Could Have Gaps in Medical Coverage Under New Law,” LA Times 5-20-2013).

Second is the fact that though more people may have insurance, many will remain underinsured. While we anticipate that there will be a net increase in the number of Americans with some form of healthcare coverage, the law enacted in 2010 doesn’t require employers or individuals to purchase insurance with deductibles and copays that will be affordable for the policy holders. An article in the Wall Street Journal (5-20-2013) reported that “Employers are increasingly recognizing they can avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage. Benefits advisers and insurance brokers are pitching these skinny plans around the country.” This would, of course, disproportionally affect lower paid workers – those who would be least able to afford significant co-payments for higher acuity services such as surgery, advanced imaging studies, and expensive medications. What that means for us is that we will continue to see not only patients who are uninsured, but also many patients who are underinsured.

The third reality is, unfortunately, not well recognized even by the leaders of some of the nation’s larger nonprofit health systems. That is the understanding that the most important measure of the value of a nonprofit hospital or clinic is not the amount of financial assistance (or “charity care”) it provides to those in need—though that is important. But the core of the nonprofit mission is more encompassing than that—and has the potential for greater and more lasting benefits.
  • Nonprofit institutions were created (or should have been created) to maximize value to the communities they serve rather than to maximize profit for shareholders.
  • In other words, the greatest value of a nonprofit health system ought to be in providing all of the care people need to live life fully and to keep them as healthy as possible, while providing none of the tests and procedures that do not improve outcomes but instead add only cost and/or risk.
  • Further, a nonprofit health system that is fulfilling its mission ought to be providing needed services at the lowest possible costs needed to sustain that mission into the future.
The way I think about it is this: A company that is owned by shareholders has an obligation to provide value to those shareholders. If we think of a nonprofit organization as being owned by the community – and particularly those that use the organization's services – the best way to provide value to those “owners” is to provide the highest quality service at the lowest appropriate cost.

As our long-term Intermountain colleagues know, we have been committed to those principles since the organization’s founding in 1975. The visionary nature of the founding commitment to those principles and a noble mission is even more apparent today, as our nation faces daunting realities about the cost and quality of healthcare.

We remain committed to those principles and to our mission of excellence. Our leadership team expresses sincere thanks to each of you who join us as we work hard to make healthcare better for the people we serve – and more fulfilling for those of us who provide care.