NONPROFIT HOSPITALS – I TOLD YOU THERE WAS AN ISSUE HERE!

This week I posted a very simple blog on why the “charitable” status of a health care provider should matter to you. Miss it? Read it here. Today, the Wall Street Journal published an article, Nonprofit Hospitals Scrutinized on Care to Needy, wherein the Journal reports “federal and state officials are increasingly questioning whether nont-for-profit hospitals provide enough care to uninsured patients to warrant the sizeable tax breaks they get for charitable work.”

Well, as I commented earlier, at least they are not trying to make a profit for shareholders, but the article has a point. You get tax breaks, why – because you are performing a public service, preventing the government (theoretically) from picking up the tab. But the IRS just published a report noting that many hospitals spend 3% or less on care for poor. Should there be rules on how much charity care to provide? Republic Senator Chuck Grassley thinks so, and has suggested such a regulation. Grassley asks the obvious question – “when nonprofit hospitals sit on big cash reserves, I wonder how much public service they’re offering.”

In my area of the world, most health care is operated by Carilion, a large and local not-for profit hospital. They are the largest employer in the region. Last I heard, they had over $400 million in reserves. They don’t pay real estate taxes at the same rate, and so our fair city losses millions each year on their not-for-profit hospital. I don’t know the amount of charity care they provide – but I know that our general district court is overwhelmed with hospital collection agents – squeezing payment for services out of our City’s poor.

The article ends with a statement from a Chicago attorney who works for not-for-profit hospitals, who says the industry “clearly has a legislative fight on their hands.” Well, shouldn’t we the tax payers also be prepared to fight? I pay higher local taxes because they don’t pay as much; my insurance indirectly pays for their un-insured – and, I care about my neighbors that cannot afford insurance, so yes, I want the non-profit hospital to be a leader in indigent care. A healthy neighbor is a healthy neighbor – so I say, way to go Senator Grassley – and good luck!

Lauren Ellerman

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.