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(20,729 posts)Not-For-Profit Hospitals Make Billionsand Provide Little Charity Care
Not-for-profit hospitals, including some of the countrys 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 dont 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 hospitalsincluding 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.
Idelson stressed that the debate shouldnt be about the merits of for-profit versus not-for-profit health care systems, but rather public versus private ones. If you look at the level of charity care and other community benefits and pricing practices, the difference between private not-for-profit and private for-profit hospitals is very small," she says. "But the difference between private and public systems is massive. The institutions that are really acting in a way people think hospitals should behave are the hard-pressed county and public hospital systems.
http://inthesetimes.com/working/entry/13698/california_hospitals_not_for_profit_but_not_for_the_poor/