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trucorsair t1_ixme5r5 wrote

This is a common misconception that “non-profit” means “no profit”. That is NOT what it means. It only means that whatever profits are generated are plowed back into the business and not distributed to shareholders, owners, or company officers via dividends and such.

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thanxhaveagood1 OP t1_ixmhpic wrote

It also means they don't pay taxes...

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Sinsilenc t1_ixn0g0k wrote

Depends on what part not all of upmc is non pro...

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trucorsair t1_ixmi03z wrote

True but that is not the first thing people think of when they hear “non-profit”.

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FUCKUPMC t1_ixmthd8 wrote

That is the first thing I think of. I think of UPMC abusing the federal tax code to not pay taxes all the while pumping as much of their profit that they can to the top level executives by way of obscene salaries.

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trucorsair t1_ixn4qh7 wrote

Ask your state regulator and legislators why they allow it…something something free market, something freedom, something something low regulation

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FUCKUPMC t1_ixnmiil wrote

Many have tried to take them down. It needs to be changed at the national level. But we all know that will never happen.

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28carslater t1_ixnvodv wrote

That's how most large non-profits operate.

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FUCKUPMC t1_ixo9dbf wrote

Yeah and they mostly all suck too. What's your point?

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asr t1_ixozmz6 wrote

A: Those people with the high salaries still pay income tax.

B: EVERY company gets to write off salaries (all salaries) before paying corporate tax. So there's nothing different here.

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pAul2437 t1_ixmwfte wrote

Non profit Salaries are highly regulated. They are paid market rate

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FUCKUPMC t1_ixmy9bo wrote

lol

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mmphoto412 t1_ixmyzch wrote

Of course it’s pAul with a dumb take

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pAul2437 t1_ixn0gpk wrote

https://www.councilofnonprofits.org/tools-resources/executive-compensation

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mmphoto412 t1_ixn11os wrote

That refers to IRS guidelines in disclosure of executive salaries and disclosure of how they determine what they should be compensated.

At best it’s a transparency measure.

Calling there salaries highly regulated based on what you provided is very misleading.

Also, nothing in the information you provided says they are required to be paid market rate, and not more.

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pAul2437 t1_ixn317q wrote

“the IRS conducts a compensation review when it examines the 990 forms nonprofits have to file annually. In part II of Schedule J, nonprofits must disclose various types of compensation. The organization must also specify how compensation was determined:

  • Compensation committee,
  • Independent compensation consultant,
  • Form 900 of other organizations,
  • Written employment contract,
  • Compensation survey or study, and/ or
  • Approval by the board or compensation committee. Organizations which report excess benefit transactions must provide further detailed information on the nature of the excess benefit transaction under Form 990 Schedule L.”

“Funders, regulators, and the IRS have also taken action to curtail high salaries in the nonprofit sector by instituting numerous penalties and accountability measures. As a result, nonprofits must approach executive compensation with a strong focus on compliance.”

https://capacityexperts.com/nonprofit-excessive-executive-compensation/

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mmphoto412 t1_ixn701m wrote

Those are all transparency measures, and measures to prevent one or a few people from making compensation changes unilaterally.

Nothing in there would prevent what us normies would consider “excessive compensation “

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pAul2437 t1_ixn8b1d wrote

your definition of excessive compensation is made up and based on your feelings. Which is fine

Those are literally IRS guidelines and there are penalties for noncompliance

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mmphoto412 t1_ixndy6b wrote

Cute…

There nothing in those guidelines to prevent excessive compensation. It’s about have an established process to set executive compensation.

Btw the “maket rate” you keep referring to is set by themselves. There are probably only dozen or so health companies at the same size.

Btw, a guideline is suggestion to on how to do something. It’s not a law, it’s not a binding regulation, it’s not enforceable

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pAul2437 t1_ixngiax wrote

“Funders, regulators, and the IRS have also taken action to curtail high salaries in the nonprofit sector by instituting numerous penalties and accountability measures. As a result, nonprofits must approach executive compensation with a strong focus on compliance.”

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tesla3by3 t1_ixnbux1 wrote

And that market rate is set by the nonprofits themselves.

Non profit salaries have to follow IRS guidelines. Far from "highly regulated'.

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pAul2437 t1_ixnd0vr wrote

The rate is based on comparable sized and missioned companies

What is more regulation than IRS code?

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tesla3by3 t1_ixnf46i wrote

There are no hard and fast rules. The IRS issues guidelines, and uses words like "reasonable" and "comparable". Highly regulated would be hard and fast rules- things like X% of median, etc

You are correct about mission and size, but there is a lot more to it than that. NP's are also competing for employees with for profit companies. That's why compensation can be base on an employees salary history as well.

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pAul2437 t1_ixnh056 wrote

So do you think upmc execs are paid higher than market to avoid showing profit like the op said?

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tesla3by3 t1_ixnm1at wrote

There’s no reason for UPMC to avoid showing a profit, other than bad PR, as this thread shows. OTOH, the high exec salaries aren’t that popular either.

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RubberChicken24 t1_ixn9qpu wrote

It's also a misconception that UPMC makes a lot of money and is non profit. Their hospital division is non profit and does struggle to make ends meet. Their insurance division is for profit and generates a boatload of money.

Insurers are the real benefactors of healthcare in the US.

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asr t1_ixozhty wrote

> and generates a boatload of money

By law this is capped at 20%.

> Insurers are the real benefactors of healthcare in the US.

It's actually less than 20% - they have to spend 80% on payouts to providers, from the remaining 20% they have to pay administrative staff, their actual profit margin is not high.

> Their hospital division is non profit and does struggle to make ends meet.

Then something is seriously wonky - the insurance is not the source of high costs, usually it's Dr's and hospitals, but you claim they are losing money. So where did it all go?!?

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Willow-girl t1_ixud7dw wrote

> It's actually less than 20% - they have to spend 80% on payouts to providers, from the remaining 20% they have to pay administrative staff, their actual profit margin is not high.

It is rules like this that drive insurance companies and hospitals to collaborate to drive prices as high as the market will bear. If your salary is coming out of that 20%, you want that 20% to be as large as possible!

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leadfoot9 t1_ixq6zlh wrote

>the insurance is not the source of high costs

Well, let's not forget the cost to patients and providers of dealing with the bureaucracies of multiple insurance companies. The insurance companies may not be charging that money directly, but it's a real cost.

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uglybushes t1_ixmhv9d wrote

Yes it means they buy more property that the city can’t collect taxes on

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trucorsair t1_ixmiiii wrote

It’s complicated. I see what you mean but, given the example in the article, the $1.5 billion dollar building being built as an example, the money will pay workers who build it (payroll taxes), buy materials (sales taxes) and such. It is not that they are just accumulating property to defer taxes, they are spending the money that has economic value to the community.

Wow downvoted because people don’t like the answer…well look in the mirror Buck-o, they are allowed to act this way thanks to YOUR state legislature and state regulators. Ask THEM why they allow it.

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S4ltyInt3ractions t1_ixmmus9 wrote

Just speculation but I would guess most laborers and even material companies aren't from the city let alone county. Trickle down economics has not proven to be a good idea Imho.

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uglybushes t1_ixmjn1p wrote

Or they have more than enough money for both.

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trucorsair t1_ixmkapc wrote

Wow you always downvote comments that provide a different perspective….ok

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uglybushes t1_ixmkjd4 wrote

I never downvote. It’s not that serious. However supporting a business that has the money to pay property tax and it’s employees more is very pathetic

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chad4359 t1_ixmn2bx wrote

Welcome to r/Pittsburgh where you either hate UPMC or are a horrible monster

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Beebajazz t1_ixmlcbp wrote

If they weren't tax exempt, the Pittsburgh region is still widely known for healthcare, and thus a lucrative place to operate. They would still have good reason to take the same action. But even if they didn't, they aren't the only corporation on the block. In fact, their tax free status is setting an example to other corporations like Google and Amazon, which then go elsewhere when we don't give them tax breaks.

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tesla3by3 t1_ixmpced wrote

You are correct that their developments add economic value to the region. But so does a for profit development, and they don’t get tax exempt status.

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Argercy t1_ixn5y08 wrote

I agree with you here, that there are taxes being paid with this money, but the government is a hungry pig and even with those taxes being paid through permits, payroll, sales tax, etc eventually the property is no longer generating income to the government and they're going to get it from somewhere else. Building these structures raises the property value of the surrounding area, so is almost like a cruel joke to everyone around them; they come in and put their building there, don't pay any property taxes but everyone else has to pay more when their property is reassessed.

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[deleted] t1_ixmm7d9 wrote

I love when people talk actual sense and get downvoted because reddit is a cesspoll of useless people.

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rxjen t1_ixmyxs3 wrote

It’s why they keep buying hospitals when we’re absolutely drowning here.

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trucorsair t1_ixn1o8p wrote

That is a state regulator issue….ask your legislators

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Valhallas_Ghost t1_ixoeyjl wrote

Ty for clarifying, I could've googled that, but either way. The title of the post had me kinda confused 😂

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ravia t1_ixp3y7d wrote

Why don't the self-subsidize patient care like Uber subsidizes rides with venture capital $$?

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kielBossa t1_ixmzv65 wrote

False, upmc has state and the irs designations as a charity, which means they have to meet certain standards are not allowed to run the organization to profit just for the sake of profit.

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trucorsair t1_ixn18v2 wrote

You apparently didn’t understand what I wrote. To expect any business to operate at negative profit is insane. Any business has to generate income to be a going concern. How many years of losses would you expect a business to absorb before they collapse in debt?

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Argercy t1_ixmrlgb wrote

If a non profit business doesn't use all their profits by putting it back into the business, by the end of the year they have to hand whatever profit wasn't spent over to the government, correct? Im not 100% positive.

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trucorsair t1_ixn4trp wrote

No, they can reserve the funds for future operations.

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tesla3by3 t1_ixn854p wrote

That is absolutely false. It's a best practice for any nonprofit to end the year with unspent money. It's carried over into the next years budge. This helps cash flows some nonprofits depend on grant money that isn't paid until after expenses are incurred. In addition, many nonprofit professionals advise keeping a reserve fund equaling up to 2 years of operating expenses.

Some types of foundations (a specific type of np) are required to disburse at least a certain percentage of their money every year, but in general there is no use it or lose it for NP's.

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Argercy t1_ixngrso wrote

Thanks for the clarification. In what circumstances would a company have to spend all their money before the end of the year? I heard in passing a while ago that someone had leftover money and they were looking for ways to spend it on their business before the end of year or the government would require it to be paid to them. I figured it was nonprofit stuff but now I'm curious what it is.

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tesla3by3 t1_ixnlinm wrote

The only thing I can of that would be close to this scenario would be government grants. If the government gave my nonprofit a grant to do a project, and I didn’t do it by a certain date, I could lose my funding. But I couldn’t just spend it on anything, like a year’s worth of office supplies or rent.

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Argercy t1_ixnodoz wrote

Hmm. Not sure then. Thanks for the reply!

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Willow-girl t1_ixudvhz wrote

IIRC, BC/BS in my home state generated so much "excess revenue" that state legislators required them to redistribute some of it to policyholders or turn it over to the state.

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pittbiomed t1_ixmtqyj wrote

Not sure , ask AHN as well that question , or the Catholic Church?

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Argercy t1_ixmz7s0 wrote

I didn't say they actually did pay it to the government, just that they were supposed to, and I'm not even all that positive if that's the rule. And if AHN and the Catholic church used their profits to buy equipment, upgrades, repairs, restorations, etc then they technically aren't breaking any laws. There is a very high chance that these expenses are a form of money laundering however that's the government's fault for allowing it (read: accepting lobby money to turn a blind eye), and our fault for allowing this country to become an American Aristocracy.

We are well past the point of our votes mattering because every single person in government is eventually bought, again because we allow it. We don't hold them accountable foe their actions, only thing left to do now is start an uprising and bring back the gallows.

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pittbiomed t1_ixnthyt wrote

Well, if all other health systems that are non profit then why the outrage that upmc does the same thing? Time to grow up and see that they are spending Billions and that’s with a B on new hospitals that will benefit who? Anyone who uses their health plan and insurance . Would you rather have them not push forward that technology and revert back to using leeches to serve their patients? Cmon now.

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