Care anal­y­sis

Ill. hos­pi­tal group high­lights value of pub­lic ser­vices

Modern Healthcare - - REGIONAL NEWS - —Crain’s Chicago Busi­ness, sis­ter pub­li­ca­tion of Modern Health­care

Even as Illi­nois hos­pi­tals wage a pub­lic­ity and lob­by­ing cam­paign to pre­serve their tax-ex­empt sta­tus, the value of their pub­lic pro­grams and ser­vices de­clined in 2010 from the year be­fore, a trade as­so­ci­a­tion re­port said.

The hos­pi­tals pro­vided pro­grams and ser­vices— such as free care and doc­tor train­ing—worth about $4.6 bil­lion in 2010, ac­cord­ing to a re­port the Illi­nois Hos­pi­tal As­so­ci­a­tion is­sued last week. That to­tal is down about 5% from the $4.86 bil­lion hos­pi­tals pro­vided in 2009.

A spokesman for the as­so­ci­a­tion said the de­cline could be at­trib­uted to sev­eral fac­tors, in­clud­ing the way hos­pi­tals re­port bad debt, mean­ing bills pa­tients don’t pay that aren’t clas­si­fied as char­ity care.

The value of hos­pi­tal pub­lic ben­e­fits has risen 26% over the past five years, the as­so­cia- tion said. The fifth an­nual re­port is in­tended to tout the broad com­mu­nity ben­e­fits pro­vided by not-for-profit hos­pi­tals as they seek to pre­serve their prop­erty tax ex­emp­tions. Gov. Pat Quinn has called for new leg­is­la­tion af­ter his Rev­enue Depart­ment in Au­gust took away ex­emp­tions from three hos­pi­tal prop­er­ties, in­clud­ing North­west­ern Me­mo­rial Hos­pi­tal’s Pren­tice Women’s Hos­pi­tal in Chicago, in part for not pro­vid­ing enough free care.

Rec­om­men­da­tions on the pro­posed statute are ex­pected to be un­veiled in March.

“If we’re go­ing to make pur­pose­ful, thought­ful de­ci­sions about the fu­ture of health­care in this state, we need to be ad­e­quately in­formed as far as what is pro­vided now, what is at stake and what could be lost,” IHA Pres­i­dent Mary­jane Wurth said.

Putting a value on hos­pi­tals’ broader com­mu­nity ben­e­fits is im­por­tant be­cause hos­pi­tal ex­ec­u­tives say the Rev­enue Depart­ment is too nar­rowly fo­cused on char­ity care and doesn’t give enough weight to other fac­tors, such as ed­u­ca­tion and be­low-mar­ket re­im­burse­ments paid by Med­i­caid and Medi­care.

A Modern Health­care anal­y­sis of in­for­ma­tion hos­pi­tals re­ported to the In­ter­nal Rev­enue Ser­vice for the 2009 tax year shows that the me­dian hos­pi­tal ded­i­cated 1.52% of its ex­penses to char­ity care and 5.87% when the costs other com­mu­nity ben­e­fits (but not bad debt) are added to the cal­cu­la­tion (Dec. 19/26, p. 6).

Hos­pi­tals are key­stones in their com­mu­ni­ties, pro­vid­ing not only health­care but thou­sands of jobs, the re­port said. In the cur­rent eco­nomic cli­mate, not-for-profit hos­pi­tals can lit­tle af­ford to start pay­ing mil­lions of dol­lars in prop­erty taxes.

In 2010, Illi­nois hos­pi­tals gave $561 mil­lion in char­ity care, a 14% hike from $492 mil­lion in 2009, ac­cord­ing to the re­port, which does not in­clude a cal­cu­la­tion of char­ity care as a per­cent­age of ex­penses or rev­enues.

Diane Li­mas, a leader in the Fair Care Coali­tion, a Chicago-based ad­vo­cacy group, said the re­port demon­strates that hos­pi­tals need to in­crease their spend­ing on char­ity care. “They can sug­ar­coat all they want,” Li­mas said.

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