Do Non-Profit Hospitals Give as Much as They Get?

April 30, 2013

Many hospitals in your community no doubt enjoy tax exempt status because they are designated as non-profit.  But what does that really mean?  It’s not that they don’t make a profit, because they most likely do. The difference is these corporations are supposed to give back to their communities. Reporter Marni Jameson took a fascinating look at the issue in a front page story in the Orlando Sentinel.  Click here to learn more about what she discovered.

In the video below, Orlando Sentinel reporter Marni Jameson discusses her article “Nonprofit hospitals: Do they give back enough?” in an interview with FOX35 in Orlando.

In the story, Jameson finds that even though Orlando is a medium-sized metro area, its two main hospitals are among the top grossing nonprofits in the country, big moneymakers.

With annual gross charges of $8 billion, Florida Hospital came in fourth out of nearly 3,000 nonprofit hospitals, according to Becker’s Hospital Review, which tracks the financial data of hospitals and health systems for national comparisons. On the same list, which was based on 2010 data, Orlando Regional Medical Center ranked 11th, with annual gross charges of $5.7 billion.

Jameson reports that while some hospital systems bring in billions, in many cases, that “give back” to care for the economically disadvantaged in their community is as low as 2%.   She writes:

On its 2010 tax form, the Pittsburgh nonprofit (University of Pittsburgh Medical Center) reported giving back 3.6 percent of its total revenues in free care, or $204 million. However, an audit of the hospital found that it actually provided only $97 million in charitable care, or 1.9 percent, according to E.J. Strassburger, the attorney representing the city in the lawsuit.

 

The No. 2 hospital on Becker’s list, Cleveland Clinic, provided $150 million in free care, or 2.6 percent of its total revenues, according to its 2010 benefits report to the community.

 

By comparison, Florida Hospital — a consolidation of seven regional hospitals — provided 5.5 percent of its revenues in charitable care in 2010, according to Soler.

 

That same year Orlando Health, another network of seven hospitals, gave back 3.5 percent in free charitable care, according to Goldstein.

Questions about sufficient charitable care are leading to the revocation of tax exempt status at some non-profit hospitals.  Four in Illinois have had their tax exempt status revoked since 2010.  And the city of Pittsburgh is in a dispute with the University of Pittsburgh Medical Center over its tax exempt status.

It’s clear from the article that hospitals have become big business, a long way from the days at the turn of the century when non-profit hospitals were essentially poorhouses run by nuns, where the disadvantaged went to die.