Following a decision to halt denials of nonprofit hospital tax exemptions in Illinois, come reports that the largest and wealthiest children's hospitals, despite being tax-exempt, provide little charity care, according to Kaiser Health News and McClatchy.
Children's Hospital Boston, for example, receives about $40 million in tax breaks, but it spends less than 1 percent of its annual expenses on charity care--about $8 million a year, notes KHN.
In 2009, Texas Children's Hospital spent less than one-half of 1 percent of its expenses--$4.3 million--on free medical care while it reported $1 billion in revenue and $1.9 billion in cash and investments, according to KHN.
However, nonprofits maintain that they contribute more to the community than just free medical care. Children's Boston's community benefit includes $23 million in Medicaid shortfalls, $9.5 million in injury prevention and mental health programs, $27 million for medical training, $16.5 million for research, and $8 million in subsidies for adolescent medicine.
And Texas Children's spent more than $80 million to fund research, teaching, and other community-based initiatives as part of its community benefit, according to an e-mail sent to KHN.
Nonprofit children's hospital officials justify the increasing revenues and spending because they say the care they deliver is complicated and the technology needed is expensive.
Furthermore, children's hospitals face significant losses from treating Medicaid patients, who make up about half of their patients, with losses amounting to about $2 billion a year, according to the National Association of Children's Hospitals and Related Institutions.
The situation raises the question of whether these charitable organizations are becoming large profitable businesses.
For more information:
- read the Kaiser Health News article 1 and article 2
- check out the KHN chart
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