If President Obama wants to squeeze billions of dollars from (healthcare) spending, as Associated Press reports(July 1), he could begin by administering a dose of fiscal reality to for-profit hospitals masquerading as charitable institutions.
Such hospitals are getting tax exemptions because they are providing charitable care---free care or deeply discounted care---for those who cant pay, writes law school dean Lawrence Velvel. The problem, though, is that theyre not providing very much charitable care.
Velvel points to Chicagos Northwestern Memorial Hospital as a case in point. It is exempt from about $50-million in property and sales taxes and exempt from taxes on the gains of its cash and investments of $1.82-billion. But the percentage of charitable care Northwestern provides is less than two percent of its revenues, writes Velvel, dean of the Massachusetts School of Law at Andover. Indeed, the $21 million Northwestern spends on charitable care is, according to the Wall Street Journal, but a fraction of what it received in tax breaks.
Another example: BJC Healthcare, a 14-hospital, St. Louis-based enterprise, claimed $1.8 billion in community benefits to various towns in 2004, Velvel writes, but over one-half of that, or $937 million, was compensation paid its employees, including $1.8 million to its CEO, while only $35 million was charitable care. Velvel said BJC is contending that as the jobs it produces have a beneficial impact on its communities it is proper to call the salaries a community benefit.
The Journal reports BJC wont count its payroll as a community benefit in the future because of new IRS standards that wont require the hospitals to provide any minimum amount of charity care. Of this development, Velvel asks, Whats that all about? These are at least supposed to be charity hospitals after all. Can these hospitals nonetheless provide no charity care since there will be no minimum amount required?
The huge tax breaks received by wealthy, supposedly charitable hospitals are raising eyebrows in Congress and elsewhere because of the dearth of true charitable care, Velvel continues, in an essay published in his new book America 2008 from Doukathsan Press.
The vast sums these institutions take in are going elsewhere than to such care. As is typical of tax free nonprofits of many types, they put their money into fabulous buildingsand, as always, large salaries for administrators, Velvel points out. At Northwestern Memorial, the Chief Executive Officer recently received a $16.4 million payout one would not ordinarily associate with a charitable institution.
Continued>>>
1 | 2
http://www.opednews.com/articles/So-Called-Charitable-Hos-by-Sherwood-Ross-090707-168.html