Tag Archives: charity care

Cash-strapped Ill. goes after hospitals’ nonprofit status

A New York Times article written by Bruce Japsen, an independent journalist writing for the Chicago News Co-Op, digs into Illinois’ recent challenges to the tax exemptions granted to a trio of prominent hospitals by virtue of their nonprofit status. The challenge, inspired in part by the state supreme court’s willingness to uphold the revocation of the nonprofit status of an Catholic hospital in Urbana last year, could expand to more than a dozen other institutions as the state scrambles to cover a looming revenue shortfall.

In its case, the state alleges that the hospitals aren’t providing a high enough proportion of charity care to fulfill the mission of a nonprofit.

All three of the hospitals the state is focusing on provided free and discounted medical care that ranged from 0.96 percent to 1.85 percent of patient-care revenue, according to the revenue department. The state also said that each one had been operating as a “for profit” business when the state’s Constitution says that “only charities are entitled to a tax exemption.”

The hospitals, for their part, point to the other benefits they provide the community, such as neonatal intensive care and burn units, that don’t always bolster their bottom lines. Advocates answer that paying taxes provides a community benefit as well, one that can readily be measured in dollars and cents. And Japsen found that paying those taxes doesn’t even seem to preclude the provision of charity care, especially at the parsimonious levels provided by the hospitals currently targeted by the state.

“The relative amounts of charity care provided by not-for-profit tax-exempts are not materially different from the amount provided by for-profit hospitals,” said Jim Unland, a longtime analyst of Illinois’ health care industry and president of the Health Capital Group, a consulting firm in Chicago. “This raises the issue of whether the tax-exempts are getting prejudicially favorable treatment.”

The three hospitals whose tax exemptions have been stripped by the state department of revenue plan to challenge the action in court, and state hospital organizations are gearing up for a lobbying push they hope will put their tax status on firmer ground.

Uninsured face delays, increased risks en route to long-term care

Writing for Heart & Soul, Yanick Rice Lamb offers up a comprehensive take on the special challenges patients and hospitals face when it comes to long-term care for the uninsured.

… a growing number of uninsured people … need long-term care after hospital stays. They lack insurance because they can’t afford it, their employers don’t offer it or they were dropped by private carriers after taking out policies on their own. Consequently, these patients experience delays in moving on to the next step in their care once they are medically ready for discharge. They are stuck in the hospital, because it’s hard to place patients in long-term care facilities or send them home with a nurse when they have no coverage, especially when there are complications. Hospitals end up picking up the tab — sometimes even after patients leave. Those costs are ultimately passed on to everyone who pays taxes and anyone who has a medical bill.

Rice Lamb fleshes out this scenario not only with anecdotes, but with a raft of statistics and studies showing that the ranks of such patients are swelling rapidly, as is the financial toll they’re taking on the system. She ties it in with the hospital “frequent flyer” and charity care issues that have received so much ink in recent years. At the same time, she takes a deeper look at the issues faced by the patients themselves, from the difficulty of spending days and weeks away from family, to the lower levels of attention they may receive from hospital staff as their stays drag on, to the increased risk of hospital-acquired infections and lack of specialized rehab.

Some of the most surprising observations came in relation to undocumented immigrants, who present major challenges despite being a small part of the patient population.

In some cases, when community support can’t be found, Rice Lamb writes that hospitals “Often pay to transport immigrants back to their countries — if the patients agree — and sometimes cover medical bills in their homelands. This often costs less than absorbing the expense of continuous care in the United States.”

Furthermore, she says, “Even with U.S. citizenship, language barriers can contribute to discharge delays. When caregivers spoke little English, the length of stay increased to 6.1 days, compared to four days for the control group, according to a study published recently in the Archives of Pediatrics & Adolescent Medicine.”

Throughout her work, Rice Lamb takes advantage of sources which reporters around the country should find useful when localizing similar topics.

Rice Lamb completed this project while on an AHCJ Media Fellowship on Health Performance, supported by the Commonwealth Fund.

Reporter digs into nonprofit hospital CEO pay

At The Atlanta Journal-Constitution‘s M.B. Pell has assembled a look at CEO pay at local nonprofit hospitals. Pell hits hard at the top of the story, pointing out that top executives are pulling in ever-growing six- and seven-digit salaries in a time of cutbacks and job losses, and demonstrating that the state loses millions in tax revenue thanks to the hospitals’ exempt status.

It’s the sort of meaty accountability work that we expect to see on a tax filing-based story. Slightly more surprising? Pell endeavored to complete the picture with a healthy dose of perspective, reminding readers that in urban areas like Atlanta, even nonprofit hospitals are often complicated billion-dollar conglomerates. In Georgia, Pell writes, “hospitals report to 27 state and federal agencies and engage in multimillion-dollar building projects. The larger hospital systems have billions in revenue and are among the largest employers in their communities. Many also operate for-profit subsidiaries.” Those “billions” provide valuable context when discussing a $600,000 pay package.

Hospital executives and industry experts consider the examination of salaries a titillating issue for the public, but a subject lacking in substance.

Even if salaries were cut dramatically, the savings would not add significantly to hospitals’ charitable missions, Parker said.

Tax exempt hospitals in the metro area provided $932 million in charitable care in 2009, according to an analysis of financial survey data reported to the state by hospitals. The hospitals spent $61 million to pay officers, directors, trustees and key employees, tax forms show.

Of the uncompensated care, nearly a third, or $287.5 million, was provided by one hospital, Grady Memorial. Grady CEO Michael Young, who left the hospital in June, made $833,646 in 2009.

But for-profit hospitals in the Atlanta area pay taxes and they provided uncompensated care totaling $87 million in 2009, according to financial survey data.

For a counterpoint, Pell turned to a few outspoken patient advocates and a 2009 study conducted by University of Connecticut researchers. It’s another data point that demonstrates the depth of Pell’s research.

CEOs of nonprofit hospitals in Connecticut who increased the number of beds at their facilities by 10 percent typically got pay increases of just under 8 percent, shows a study of nonprofit hospitals by two professors at the University of Connecticut.

A 10 percent increase in the amount of charity care provided, however, typically resulted in a 1.5 percent decrease in the CEO’s pay, the study shows.

Pell’s story takes the national picture into account, but if you’re just looking to get up to speed on the national debate over nonprofit hospitals, charity care and tax exemption as it relates to executive pay, I recommend you scroll down to the final subhead: “Eyeing tax exemption.”

Tax documents show CEO pay exceeds charity care at some Calif. nonprofit hospitals

Ron Shinkman, editor of the trade newsletter Payers & Providers, spent four months reviewing tax documents filed by 120 nonprofit California hospitals in 2007 and 2008. He found that base CEO compensation was somewhere around $517,123 in that period, which is more than double national numbers from a survey published in 2001.

To add perspective to the numbers, California Watch’s Christina Jewett looked at Shinkman’s research – especially the sentence that mentioned “11 hospital executives whose compensation exceeded the cost of the charity care provided by their hospitals during the reporting year” – and evaluated it in terms of the national debate over the amount of charity care provided by nonprofit hospitals.

Shinkman is charging for full copies of his work and the resulting white paper, but between Jewett’s coverage and the brief version Shinkman has posted, readers should be able to get a pretty good idea of where the story is going and, perhaps more importantly, how to report on CEO pay at your local nonprofit hospitals.

For more help covering nonprofit hospitals:

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Reporter covers patient ‘dumping’ from inside

The Philadelphia Inquirer‘s Michael Vitez has been given free reign for several months now to explore and report on Abington Memorial Hospital as an embedded reporter.

The result has been a mix of deep, wonderfully chosen anecdotes accompanied by quotes and hospital introspection that go far beyond what you often see in “look what went wrong at the local hospital!” stories.

His latest installment explores the effect of patient “dumping” on hospitals through the story of an 83-year-old illegal immigrant from Korea whose family dropped her off at Abington out of desperation and had no intention of picking her up on her discharge date. Vitez’ report is distinguished by his honest, thoughtful approach to both patient and caregiver.

In previous dispatches, he has chronicled how Abington is working to prevent with hospital-acquired infections and, as Covering Health has covered previously, palliative care.