Hollywood's Health Care Hypocrisy

There's never a shortage of hypocrisy in Tinsel Town. The world's entertainment capital practically invented the double standard and lives by a simple edict: do as we say, not as we do.

After all, it's the Hollywood crowd that lectures us on free speech, then black-lists anyone who doesn't tow the liberal party line. Hollywood is the same place that rails against the evils of capitalism, but never blinks an eye when top stars cash a $20 million paycheck for a single film.

We've also heard members of the film community demand nationalized health care, citing the examples of Canada and various European countries. But when it comes to putting their money where their mouth is, Hollywood comes up (predictably) short.

The latest example can be found at the retirement complex operated by Motion Picture & Television Fund (MPTF) in Woodland Hills, California. For decades, the MPTF has operated a hospital and long-term care facility for aging actors, studio employees and film technicians. The health care complex is funded through a combination of MediCare and Medi-Cal payments; private medical insurance and donations from the entertainment community.

However, the health care center is facing an uncertain future. Last month, the MPTF announced that it would close the hospital and long-term care facility later this year, citing unsustainable financial losses. Representatives of the fund claimed it was heading towards insolvency, thanks to increased costs at the hospital and long-term care facility. Dreamworks mogual Jeffrey Katzenberg, a chief fund-raiser for the charity, claimed the MPTF was losing $10 million a year on the health care complex.

But there's one little problem with that scenario; it doesn't appear to be true. After the fund announced plans to close the hospital and long term care facility, reporter Andrew Gumbel of TheWrap.com, a newly-launched entertainment industry news site, did a little digging and obtained copies of recent tax returns and audits. They paint a much different picture of the MPTF and its finances:

The numbers being bandied about by Jeffrey Katzenberg, the MPTF’s chief fundraiser, and other officials do not square with the organization’s own official accounting numbers and tax returns.

Those documents – the most recent filed with the Internal Revenue Service in November 2008 – show no $10 million losses, or any losses at all. The fund’s assets – described in one press release as “draining… at an alarming rate” – actually increased in 2006 and 2007, the last year for which figures are available.

And while it is true that Medi-Cal reimbursements have indeed declined since last summer for hospital care (though not for other medical and nursing-home services), the fund’s accounts show a net increase in government reimbursements for both 2006 and 2007.

One nursing care expert who has looked closely at the reimbursement numbers, Betsy Hite of the California Association of Health Facilities, characterized the MPTF’s explanation of the closures as “hogwash.”

Officials from the United Healthcare Workers union, which concluded a nine-month long contract negotiation with the MPTF last April, said they researched the fund’s finances extensively and found no cause for concern.
Confronted with the contradiction between their public comment and financial statements, representatives of the MPTF have gone silent. Mr. Katzenberg has only offered explanations through Hollywood blogger Nikke Finke, and refuses to be quoted directly. Meanwhile, the MPTF board remains resolute; the hospital and long-term care facility will close later this year, meaning that 100 patients--many in their 80s and 90s--will be looking for a new place to live.

There is, of course, a simple solution to all of this. Katzenberg and some of his friends could stage a few more fund-raisers, or increase their annual donations. For roughly of what Brad Pitt or Angelina Jolie will make on their next film, the supposed deficit would be erased, and the health care complex could remain in operation.

Instead, the MPTF board is planning to replace the hospital and long-term care facility with an assisted living condo complex. Details of that project have not been released. Meanwhile, a follow-up report by Mr. Gumbel reveals that the MPTF spends almost $60 million a year on salaries and related expenses. That means the average MPTF employee makes $80-90,000 a year, although the union representing health care workers at the Woodland Hills complex claims its members make far less--about $17 an hour for nursing assistants and $35 an hour for registered nurses.

Meanwhile, the two top officials at the health care complex earn $600,000 and $350,000 a year, respectively. While we don't favor Obama-style caps on executive pay, the MPTF pays its top administrators about six times the national average. The facility's CEO, Dr. David Tillman, received a 20% pay raise while Mr. Katzenburg was complaining about "unsustainable" losses.

Incidentally, the MPTF held its "Night Before" fundraiser in Los Angeles on Saturday evening. The annual event, which benefits the fund's "charitable health care" and other community services, was headlined by a number of Hollywood swells, including Tom Cruise, George Clooney, Jennifer Anniston, Jamie Foxx, Will Smith and Reese Witherspoon, to name a few. The benefit was expected to raise at least $6 million for the fund and its various projects. If nothing else, the $6 million could make a nice down payment on that condo project.

No wonder so many in the entertainment community are excited about "Obama Care." With a little help from the feds, the film and TV crowd can wiggle out of that 80-year-old pledge to "take care of their own," at least as far as health care is concerned.