After the recent news of Planned Parenthood’s departure from the Title X federal family planning program, many have made the point that the abortion giant’s decision to kick itself out of Title X in favor of continuing to refer women for abortions rather puts the lie to its claim to be “America’s most trusted provider of sexual and reproductive health care.” Some even ask, “Why doesn’t Planned Parenthood seem to care?”
The truth is that Planned Parenthood doesn’t care all that much, at least not enough to hold onto its Title X contracts. In fact, it could very well be that Planned Parenthood doesn’t care because its business model doesn’t need it. Its business does need elective abortion referrals, however, and lots of them.
Planned Parenthood serves only about 40% of the nation’s Title X patients, for which it received roughly $60 million in funding awarded last year. Title X is a grant program, meaning that Planned Parenthood affiliates receive program-based funding for their overhead and administrative costs. The lion’s share of Planned Parenthood’s funding comes from Medicaid family planning reimbursements for patient services – approximately $500 million annually.
Planned Parenthood’s business model for patient services is a three-legged stool, each leg of which supports the others and depends on the others. About one-third of Planned Parenthood’s annual funding attributable to patient services comes from chemical and barrier birth control. Chemical birth control doesn’t stop a user from contracting sexually transmitted diseases, so another third of Planned Parenthood’s revenue comes from sexually-transmitted infection screening and treatment. Birth control methods fail on a predictable basis, even if practiced to the letter (and they’re often not); hence, the final one-third in patient revenue from abortions – many from Planned Parenthood’s own patients. (Planned Parenthood famously claims that only 3% of its services are abortion-related, but even the Washington Postgave that whopper three Pinnochios.) Planned Parenthood doesn’t break out revenue from abortions publicly, but at 332,750 abortions in 2018 (the most since 2011-12) at an conservatively estimated average cost of $400 per abortion, Planned Parenthood raked in over $133 million in abortion revenue last year. How much of that abortion business came from referrals from Planned Parenthood’s own Title X-funded family planning centers we don’t know, but it’s a fair guess that it was a significant portion of them. Facing a losing uphill battle in court over the new Title X “Protect Life Rule,” and contemplating a realistic possibility that it would not be able maintain a steady stream of tens of millions of referrals of its birth control and STI patients to its abortion centers, it’s conceivable that Planned Parenthood management simply decided that it was at least a wash to bow out of the program and not risk damaging its cash cow. What’s more, Planned Parenthood may be betting that it can parlay sympathy for its plight into bigger private donations and more government funding. Unfortunately, it might be a good bet – its 2018 annual report shows almost a hundred million dollars more in private contributions in 2018 over the previous year, and about $20 million more in taxpayer funding over the year.
Sadly, given that the number of patients who frequent Planned Parenthood centers and the health services they actually provide there have been dropping steadily for years, it won’t take a lot to make up the difference. Not that Planned Parenthood cares all that much.