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Cottage Industry


A recently released government report states healthcare spending grew to 17.3 percent of the U.S. economy last year, making it the greatest one-year increase in its share of the economy in the 50 years that government records have been kept. Keeping right in step, or, perhaps, in the forefront, Santa Barbara Cottage Hospital recently raised some of its rates, even though the nonprofit hospital (with 95 percent of the area’s market) showed a $52.7-million profit on their IRS forms for 2007, the latest publicly available tax documents. Posted on Cottage Hospital’s chargemaster’s statement, the projected income from rate increases the hospital put into effect last spring:

Pharmacy increase will add another $12,032,566. (Their pharmaceutical markups were already 2,999% above cost, before new markups.)

Room charge increase will add another $4,970,004.

Total additional revenue from increases: $17,002,570.

Total projected 12-month revenue: $1,205, 061,408.

There are no government regulations overseeing hospital prices, no market forces in Santa Barbara to theoretically keep hospital prices in check, and no limit to what this hospital can charge patients. And what was this increase for, when the “nonprofit” hospital shows excesses (profits) in the millions and millions? Why the gross, uncontrollable financial exploitation of the captive, sick people in the greater Santa Barbara area? — Faith Ozan

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