Planned Parenthood and the Public Purse

Charles A. “Chuck” Donovan  

In a radio interview on the Diane Rehm Show on July 30, Terry O’Neill of the National Organization for Women (NOW) made a series of claims regarding Planned Parenthood that deserve a much closer look. O’Neill asserted that, “The claim that we can somehow replace Planned Parenthood overnight – you shut down all the Planned Parenthood’s [sic] clinics and that they could be replaced overnight, is silly and specious.”

 

It is indeed silly and specious because none of the proposals pending in Congress would shut down Planned Parenthood clinics and replace them, overnight or anytime. Instead, the discussion is about shifting the $528.4 million of total government funds away from Planned Parenthood and to the thousands of existing community health centers and other providers. As the following points make clear, Planned Parenthood can absorb the cut considering its relationship with private donors and its excess revenue, while on the other hand, community health centers have the capacity to acquire and serve new patients. Proposals in Congress to “defund” Planned Parenthood, therefore, merely reallocate women’s health expenditures to agencies that offer women a full menu of primary care.

 

  1. Funding for Women’s Health Care Services Is Not Reduced by a Single Penny

 

Proposals in Congress to either impose a one-year moratorium on Planned Parenthood funding while it is under investigation, or to end that funding permanently, repurpose the full amount of federal dollars involved and make them available to federally qualified health centers.[1] The proposed legislation that would have defunded Planned Parenthood at the federal level, and failed in the U.S. Senate on August 3 by a margin of 53-46 (60 votes being necessary to invoke cloture and proceed to a direct vote on the measure), would have shifted $528.4 million, if fully reallocated and if all state and local government sources had followed suit, to community health centers. That sum is sufficient to support 1.56 million new CHC patients at an average family planning patient cost of $339 per year (using Planned Parenthood’s 2013-14 expenses for medical care, management and general, but not direct fundraising expenses[2]) and 880,000 new CHC patients using the higher $600 per patient per year community health center cost[3] (though CHC patients would receive a much fuller range of women’s primary care services they are either presently receiving at a third site – neither Planned Parenthood nor a CHC – or not receiving at all).

 

  1. Planned Parenthood Would Remain a Well-Funded Nonprofit

 

O’Neill notes, accurately, that Planned Parenthood currently reports 2.7 million women and men as clients. First, it would be difficult if not impossible, especially given the states that support Planned Parenthood wholeheartedly with public funds, to remove all of Planned Parenthood’s federal, state and local funding, much less to do it simultaneously. But even if every penny of the group’s $528.4 million in government funding ended tomorrow, the group would retain 59% of its current baseline income. One could grant a slight loss in client load due just to lower economies of scale, but even so, an estimated 1.6 million of Planned Parenthood’s current clients would remain covered by the group’s budget – without taking into account any internal reallocation of funds to low-income women, lower-cost centers, or lower-cost services.

 

  1. The Average Increase in Health Center Client Load Would Be Two Women Per Week

 

With a potential net change of just over 1 million women in its clientele, the scale of the shift comes into clearer focus. There are approximately 9,000 federally qualified health center (FQHC) service sites in the United States that provide primary care services and preventive health services,[4] including contraception, prenatal care, and mammograms in many locations. In addition, there are another 300 “look-alike” FQHC sites that provide similar medical services, as well as another 4,000 rural health centers (RHCs)[5] that provide a range of women’s health care. The FQHC sites alone already care for nearly 23 million patients yearly.[6] If Planned Parenthood could no longer “afford” to care for 1 million women, the net change in patient population per FQHC service site is approximately 110 women – that is, two additional women per week for basic well woman care, STD checks, family planning if desired, Pap smears and so forth.

 

  1. Planned Parenthood Is Not Spending Millions in Net Revenue It Already Receives

 

This does not assume what would seem obvious as a matter of taxpayer priorities: Planned Parenthood is one of the best-funded nonprofits in the country with routinely positive balance sheets. Over the past decade its excess revenue over expenses has totaled three quarters of a billion dollars.[7] In the last year for which data is available (2013-14), Planned Parenthood and its affiliates had net income of $127 million.[8] At Planned Parenthood’s annual per patient cost of approximately $339, the organization could serve an additional 375,000 women annually with this net income. The organization would still have a balanced budget. Moreover, it undoubtedly has access to donor gifts of a size other nonprofits cannot rival due to its appeal to elite individuals and institutions.

 

  1. Planned Parenthood Has Access to the World’s Richest Donors

 

In 2013 when Congress last considered, but did not adopt, a significant reduction in Planned Parenthood funding, the national office received a one-time anonymous gift of $62 million from a single donor. Warren Buffet, the world’s third richest man, gave Planned Parenthood $230 million between 2010 and 2013. Few if any national nonprofits can command private funding of this magnitude – merely on a prospect of income reduction (much less what PP could do with a genuine reduction in public largesse). A gift of $62 million allows another 183,000 women to be served – if these women were to choose to forgo the richer array of services available at CHCs and remain at the local PP.

 

  1. Planned Parenthood’s Salary Costs Are Exorbitant

 

There is another deep disparity of which Congress should be aware and that is in salaries at PP. Consider for example the top three salaries at Planned Parenthood of Minnesota – $374,000, $372,000, and $238,000 – or a combined $1,205,207, if income from other related groups is included.[9] If the top salary of $374,000 were merely reduced to $100,000, an additional $274,000 would be available without further budgetary change, serving an additional 808 patients at this Planned Parenthood affiliate alone.   The top salary at the average FQHC in the Minneapolis-St. Paul area is $59,000.[10] Planned Parenthood facilities are very top-heavy from a salary standpoint, a serious concern in an era of crimped reimbursements for other medical service providers.

 

In short, another way to look at Congressional reprogramming of Planned Parenthood funding would be to see it as a move from a high-profit, high-cost boutique supplier to a true-nonprofit, low-cost approach. Moreover, the actual changes in service involve improvements in access to primary care and other services from which women will benefit. The cost to the individual patient (and therefore to the government or private insurance) of family planning services will not change and the availability of other primary care services not currently accessed (the real crisis for these women) will be solved. In fact, it may devolve that Planned Parenthood becomes a specialty provider of certain types of birth control not preferred or offered elsewhere. The ability to concentrate on what it does uniquely should make Planned Parenthood a financially stable participant in a niche it has chosen to occupy.

 

  1. Planned Parenthood’s Client Load Is Declining for Other Reasons

 

It should be noted that a decline in clients at Planned Parenthood may already be well underway as women acquire more plentiful options regarding both providers and services, thanks, somewhat ironically, to the Affordable Care Act (ACA). As Reuters reported on September 8, the generous preventive services mandated under the ACA are making women “less reliant” on Planned Parenthood.[11] In fact, Lori Carpenter, the president and CEO of Planned Parenthood of Mid and South Michigan, said, “Some people relied on us because they were uninsured prior to the Affordable Care Act. Now they can go anywhere for care, and some of them have been.”

 

  1. Planned Parenthood Can Suspend Offensive Practices

 

Finally, Planned Parenthood has the option to suspend and withdraw from the activities that have proved very controversial – abortions. If, as Planned Parenthood claims, abortions constitute “only three percent” of its services (with the organ trade activity tied to abortions even more controversial and, the organization says, not a net contributor to its other work), there is little or no sacrifice involved in jettisoning this activity in order to keep delivering other medical services that have drawn little or no opposition. Two decades ago, Planned Parenthood conducted an intense internal debate on this topic when its then-president, nurse Pamela Maraldo, proposed that the organization move into primary care in order to survive coming changes in health care. As reported by The New York Times,[12] this stance produced a firestorm within the group, with internal accusations that her plan focused too little on abortion. Maraldo resigned in the wake of the controversy and Planned Parenthood eschewed a national strategy of providing primary care.

 

In summary, it is altogether unclear, apart from the current controversies in which it is embroiled, why Congress should expend half a billion dollars of taxpayer funds a year to maintain a network of agencies whose services will largely continue if privately funded and which is declining thanks to patient empowerment and the basic truth that women’s medical needs, like men’s, involve much more than their reproductive systems.

 

Chuck Donovan is president of the Charlotte Lozier Institute.

 

[1] S. 1881 reads at Section 1(3): “All funds no longer available to Planned Parenthood will continue to be made available to other eligible entities to provide women’s health care services.”

[2] See page 22 of 2013-2014 Planned Parenthood Annual Report, http://www.plannedparenthood.org/files/6714/1996/2641/2013-2014_Annual_Report_FINAL_WEB_VERSION.pdf

[3] https://www.nachc.com/client/A%20Local%20Prescription%20Final%20brief%203%2022%2011.pdf

[4] http://bphc.hrsa.gov/about/healthcenterfactsheet.pdf (accessed September 15, 2015).

[5] https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/rhclistbyprovidername.pdf

[6] http://bphc.hrsa.gov/about/healthcenterfactsheet.pdf

[7] https://lozierinstitute.org/planned-parenthood-shows-%C2%BE-billion-of-excess-of-revenue-over-past-decade/

[8] http://www.plannedparenthood.org/files/6714/1996/2641/2013-2014_Annual_Report_FINAL_WEB_VERSION.pdf (accessed Sept. 14, 2015).

[9] http://www.guidestar.org/FinDocuments/2013/410/948/2013-410948382-0ae646ab-9.pdf

[10] http://www.indeed.com/salary?q1=Community+Health+Center+Director&l1=Minneapolis%2C+MN (accessed Sept. 14, 2015).

[11] Jilian Mincer, “INSIGHT-Planned Parenthood faces unexpected challenge from Obamacare,” Reuters (Sept 8, 2015) at http://www.reuters.com/article/2015/09/08/usa-plannedparenthood-idUSL1N11A1JD20150908.

[12] Tamar Lewin, “Planned Parenthood President Resigns,” The New York Times (July 22, 1995); at http://www.nytimes.com/1995/07/22/us/planned-parenthood-president-resigns.html. Among the events that led to Maraldo’s resignation, Lewin wrote, “Ms. Maraldo’s first draft of a reinvention document, suggesting that every affiliate become a broad women’s health-care provider, was unpopular. In a confidential letter sent to affiliates nationwide, some Planned Parenthood officials complained that ‘never has a document seemed so out of touch with our mission,’ and pointed out that abortion was mentioned only eight times in 68 pages, and never in the context of discussing the future.”

 

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