Not-For-Profit Hospitals Make Billions—and Provide Little Charity Care

[xchrom]

http://www.alternet.org/labor/not-profit-hospitals-make-billions-and-provide-little-charity-care




Not-for-profit hospitals, including some of the country’s biggest and best-known institutions, are almost entirely tax exempt, in part because of the expectation they will provide free or low-cost “charity care" to those in need. But a report released this week by a research arm of California Nurses Association / National Nurses United found that California not-for-profit hospitals are reaping huge tax benefits while providing minimal charity care.

Many people don’t realize that not-for-profit institutions can accumulate profits. They can; the profit cannot be disbursed to individual owners or stockholders but rather is supposed to be reinvested for the good of the community. With hospitals, that is generally assumed to include the provision of charity care to uninsured or low-income people. But while 11 states, including Texas and Alabama, mandate specific levels of charity care, California and the federal government do not.

As a result, not-for-profit tax breaks for well-known California hospitals–including Cedars Sinai, Kaiser Permanente and Stanford University--dwarf the level of charity care provided. Overall, the 196 hospitals surveyed received $3.3 billion in 2010 state and federal tax exemptions and spent only $1.4 billion on charity care--a gap of $1.8 billion. Three-quarters of the hospitals got more dollars in tax breaks than they spent on charity care. Half spent less than 2.46 percent of their operating expenses on charity care.

The tax breaks hurt financially strapped counties and towns; according to the report, California counties and municipalities lost about $1 billion in tax revenue they would have otherwise collected in 2010. Public budgets suffer when large institutions don’t pay taxes, and budget crunches are often taken out on public workers, as well as those who rely on the services they provide. Counties or cities also end up essentially picking up the tab for health care when impoverished patients can’t pay and hospitals either deny care–diverting the patients elsewhere–or insist on billing. The report notes that California counties and towns paid $450 million in 2010 to for-profit and not-for-profit hospitals for care for people who could not pay their medical bills.

[1monster]

1. A local not for profit hospital was able to pay cash for a $30,000,000 extension a few years ago.

They decided that the extension was not large enough and paid cash for an even bigger add on.

When the insurance company dragged their feet on some of the payments (which they eventually paid), the hospital had some of the most viscious collectors start harassing us within one month of the bill going out. I'm talking name calling, screaming, constant phone calls, and threats of laws suits.

[no_hypocrisy]

2. Good Samiritan Hospital in Suffern, NY is at a financial breaking point

from all the charity care it renders. They have a large contingent of indigent patients who are Hispanic and Hasidic.

[greymattermom]

3. buying other hospitals

In some cities the major nonprofit uses its funds to buy other hospitals. Soon they will all be *** Health Care. It will be a monopoly. Then what?

[Beacool]

4. Charity care? Even people with insurance can't go.

The hospital in my town was sold to a company that won't take most private insurance. I mean, they won't take Aetna, United Health, CIGNA, Oxford and several others. Therefore, if something happens to me, I have only one hospital in the region I can go to or I have to go to NYC. I guess it's cheaper to bury you than treat you.

Infuriating!!!!

[Wednesdays]

5. K&R