You two touched on a topic at the very end of the discussion that has intrigued me for many years - the purpose of the non-profit.
It’s a very complicated topic, but I can briefly say that I learned much about it while working in the healthcare industry for a for-profit company that competes with non-profits, selling identical services (clinical lab tests) . To my amazement, I learned that the non-profits routinely charge 3 - 4 x the amount we charged at the for-profit for the same panel of tests. This dynamic had nothing to do with normal market factors, and was a simple reflection of the perversities of healthcare funded by an employer-pay insurance system.
The larger non-profit hospital systems, are anything but “non-profit”. They are rich, they make operating profits, they make tax exempt income from their “net assets” (I.e., endowment), and they even receive tax deductible contributions from donors, and add it to the pile of money they already have.
Glenn, I have directly engaged many leaders in the industry about this subject which obviously extends to the higher education world (and even elite private K - 12 schools). The awkwardness of their response tells everything about the dishonesty of the system. I would love your thoughts one day on this subject, especially from an esteemed economist such as you, who doesn’t need to worry any more about the career suicide implications of talking about it. :)
You two touched on a topic at the very end of the discussion that has intrigued me for many years - the purpose of the non-profit.
It’s a very complicated topic, but I can briefly say that I learned much about it while working in the healthcare industry for a for-profit company that competes with non-profits, selling identical services (clinical lab tests) . To my amazement, I learned that the non-profits routinely charge 3 - 4 x the amount we charged at the for-profit for the same panel of tests. This dynamic had nothing to do with normal market factors, and was a simple reflection of the perversities of healthcare funded by an employer-pay insurance system.
The larger non-profit hospital systems, are anything but “non-profit”. They are rich, they make operating profits, they make tax exempt income from their “net assets” (I.e., endowment), and they even receive tax deductible contributions from donors, and add it to the pile of money they already have.
Glenn, I have directly engaged many leaders in the industry about this subject which obviously extends to the higher education world (and even elite private K - 12 schools). The awkwardness of their response tells everything about the dishonesty of the system. I would love your thoughts one day on this subject, especially from an esteemed economist such as you, who doesn’t need to worry any more about the career suicide implications of talking about it. :)