RICHMOND -- Virginia has a widespread problem with unfair competition between nonprofit and for-profit hospitals, according to lawmakers who say that without further study it will be impossible to find a solution.
"It is like subterranean roots in a tree and it is creeping and growing all over the place," said Del. Bernard Cohen (D-Alexandria). The abusers "are going to get bold and arrogant, and it's going to get worse," he said.
But a legislative study group, the joint subcommittee investigating the extent of unfair competition between nonprofit organizations and small for-profit businesses in Virginia, has said there is little the General Assembly can do about the situation now.
Group members said it is not easy to obtain information that would show the scope of the problem, and more study is needed.
Thomas Inman, a citizen appointee to the study group, said that without more thorough information, the panel would be making a "shot in the dark" if it offered proposals to address the issue, which committee members said is not limited to just hospitals.
But Cohen said that if the subcommittee ends its study with no recommendations, it would send a signal to nonprofit groups accused of abusing their status that they can continue doing so.
The group appears ready to endorse several ideas and to recommend additional study on the health care field.
Cohen said the subcommittee has agreed in principal to seek legislation that would require nonprofit groups that gross $10 million or more a year to provide fuller accounting to the Virginia Tax Department.
The lawmakers agreed that the information should be made public.
Lawmakers agreed that one problem they should tackle is the "captive referral" among nonprofit hospitals. That occurs when nonprofit hospitals establish for-profit businesses, such as home supply dealerships, and refer their discharged patients to those businesses.
One possible improvement would be to require the hospitals to tell patients there are other suppliers available, lawmakers said.
Some witnesses told the subcommittee that nonprofit status should be stripped from all hospitals, but lawmakers pointed out that the nonprofit hospitals provide nearly all care given to poor patients.
Committee members also said the problem is not confined to the health care industry. For example, some nonprofit providers of insurance are getting into unrelated businesses that compete with smaller private companies, said Del. William Wilson, D-Covington. He said the General Assembly "needs some mechanism to continue to ponder this thing."