In California, not-for-profit hospitals in 2010 received more than $1.8 billion in government subsidies and benefits beyond what they provided to communities in charity care, according to a report released Wednesday by the California Nurses Association-National Nurses United, the Contra Costa Times reports (Kleffman, Contra Costa Times, 8/15).
The report -- conducted by the Institute for Health and Socio-Economic Policy, the research arm of CNA-NNU -- was presented at a hearing of the California Senate Select Committee on Charity Care and Nonprofit Hospitals (CNA release, 8/15).
The CNA-NNU is calling on lawmakers to pass legislation that would set a minimum level of charity care for all not-for-profit hospitals in exchange for their tax-exempt status (Contra Costa Times, 8/15).
Not-for-profit hospitals are required by law to report annually to state officials on their plans to provide community benefits, such as no-cost or reduced-cost health care for low income individuals, known as charity care.
However, the facilities are not required to provide a specific set of community benefits.
In addition, the Office of Statewide Health Planning and Development does not have authority to fine hospitals that do not submit community benefit plans.
A recent audit of not-for-profit hospitals found that 15 did not submit community benefit plans in 2010.
In addition, the audit found that the amount of charity care provided by hospitals varied based on the populations they serve and their policies for determining eligibility for such care (California Healthline, 8/15).
Details of CNA-NNU Report
CNA-NNU researchers examined 2010 data from 196 not-for-profit hospitals in California that are required to provide community benefit plans.
The report found that:
- Half of the hospitals spent 2.46% or less of their operating expenses on charity care; and
- California counties and cities lost more than $1 billion because of the tax exemption status of not-for-profit hospitals and what counties pay directly to the hospitals for care of low-income individuals.
In addition, the report determined that the hospitals with the worst records for providing charity care relative to the government subsidies they received were:
- Alta Bates Medical Center;
- California Pacific Medical Center;
- Cedars Sinai Medical Center; and
- Stanford University Hospital (CNA release, 8/15).
Comments from CNA-NNU
At the hearing, Michael Lighty -- public policy director for CNA-NNU -- said, "We are calling on state officials to pass legislating to rein in the abuses we have seen."
Lighty said lawmakers should require not-for-profit hospitals to spend at least 8% of their combined operating and non-operating revenue on charity care.
Response From Hospitals
Anne McLeod -- senior vice president of health policy for the California Hospital Association -- said that charity care is only part of the community benefits that not-for-profit hospitals provide.
She said that the facilities spend millions of dollars on services such as:
- Free health screenings;
- Health vans;
- No-cost surgeries;
- Research; and
- Support for clinics and programs (Contra Costa Times, 8/15).
CHA has argued that setting a specific amount of charity care that all not-for-profit hospitals must provide could limit how the facilities serve communities (California Healthline, 8/15).