Inova Fumbled Redskins Naming Rights Deal

The following is a post written by Michael W. Thompson, President of the Thomas Jefferson Institute for Public Policy"

"Not too long ago, sports facility naming rights were reserved for corporations with big bank accounts and grandiose advertising campaigns: automobile companies, banks, technology giants and beer companies. Now another category of advertiser, a disturbing one, has entered the picture: nonprofit hospitals.

Nonprofit hospitals in Virginia, including Inova, have been a part of the chorus urging a dramatic expansion of Medicaid and the effort to block competition through reforming the monopolistic regulations known as the Certificate of Public Need. These nonprofit hospitals say that their finances are shaky and government subsidies are needed.

But last month, the Washington Redskins sold the naming rights to their training facility and headquarters in Ashburn to nonprofit mega-hospital chain Inova Health. While the financial details of the Inova deal have yet to be released, a similar partnership between the Redskins and Bon Secours, another nonprofit health system, may provide some idea.

In 2012, Bon Secours Richmond Health System became the sponsor of the Redskins' training camp facility in Richmond. It agreed to pay $3.2 million for the naming rights.

Nonprofit hospitals such as Inova and Bon Secours are expected to provide charity care, not advertising for major NFL teams, in exchange for tax exemptions that include not paying property taxes. The Virginia Hospital & Healthcare Association reported that in fiscal 2013 Virginia's nonprofit hospitals benefited from more than $928 million in tax exemptions. Yet, a Watchdog.org review of 2012-2013 financial reports found that charity care averaged only 4.2 percent of total expenses for Virginia's nonprofit hospitals.

Inova's 2014 financial numbers clearly show that it can do a lot more to help those who can't pay for health care. Inova reported a compensation package for its chief executive that rivals many of the Redskins players' contracts at about $6 million, a $217.7 million operating surplus and nearly $2 billion net assets on hand.

These numbers make it hard to accept the "we're hurting financially" argument and show how much Inova could do to help those who need health care but can't afford it.

If the Inova-Redskins deal is comparable to the one struck by Bon Secours, a lot of needy folks could be helped by this nonprofit hospital. Based on the Centers for Medicare and Medicaid Services, $3.2 million could, for instance, fund 1,407 cancer-detecting biopsies for those who can't afford them. Money spent on advertising with the Redskins could be better spent increasing the percentage of charity care provided to Virginians in need.

When we are told that our hospitals are in financial trouble and that expanding Medicaid is one way to help this situation or that maintaining noncompetitive practices that tend to force more expensive health-care costs on our patients is needed, let's take a serious look to see if this
is true. Some hospitals might be stressed financially, but not all, and certainly not those such as Inova and Bon Secours that spend millions of dollars helping the bottom line of major professional football teams. These NFL teams can find sponsors in the for-profit sector without too much trouble. Nonprofit hospitals have no reason to invest money into sports training facilities when that money instead could provide care for the needy.

When the General Assembly goes back in session this January, Inova's lobbyists will likely claim that the hospital's ability to meet the growing need for charity care is contingent on the legislature maintaining the current anti-competitive Certificate of Public Need law. But if Inova (and other nonprofit hospitals that spend money on sports advertising) were living up to its nonprofit expectations, it would spend those millions of dollars to help those in need.

Nonprofit hospitals should be held accountable on behalf of the taxpayers and patients who are subsidizing them. Our lawmakers should review the 4.2 percent of expenses dedicated to charitable care by our nonprofit hospitals in Virginia and determine if that number should be higher. They should also support meaningful Certificate of Public Need reforms. As a recent study by George Mason University's Mercatus Center shows, these laws do not keep health-care costs low."