In the last few years, many hospitals have begun a new initiative to save money and limit the amount of debt the hospital accumulates. The new policy requires patients with inadequate health insurance to pay the up front costs for their cancer treatments. A recent case has made headlines in the press. Lisa Kelly, was diagnosed with leukemia in 2006, she was referred to seek immediate care at the M.D. Anderson Cancer. The cancer center had already adopted their new financial policy in 2005 requiring patients to cover costs before treatment. The hospital requested that Kelly pay over $100,000 before they would begin any form of treatment or testing. 

            Kelly came from a family that could afford the treatment, but like most others, have their assets tied up in investments for their retirement. They just don’t simply have $100,000 in cash sitting around. The hospitals have dealt with a rise in uncompensated costs in recent years, which was the reason for implementing this new policy. The new policy helped the M.D. Anderson Cancer Center reduce bad debt from $52 million to $33 million in one year. Many financial analysts in the hospitals rationalize that this is the proper way for the hospital to protect their own assets but this practice becomes questionable when the M.D. Anderson Cancer Center posted a net income of $310 million in 2007 with the hospital’s endowment totaling about $1.9 billion. As a “non-profit” hospital, with a steady increase of revenue and a net income over $300 million, you need to question their practices of decreasing their “Free Care” service to under $100 million in 2007.

            The M.D. Anderson Cancer Center is considered one of the best cancer research and treatment centers in the United States and is also one of the most profitable hospitals in the United States. This is odd, considering it receives tax advantages as a non-profit hospital. Another issue to address is the compensation for the president of the institution who receives an annual salary of $1.18 million.