Bay Area hospitals use fuzzy math on community benefits reporting

Where have all the community benefits gone?

That's a question asked by the Berkeley, California-based Greenlining Institute, which recently examined how hospitals in San Francisco were expending their community benefits. Greenlining could not find much of an answer.

Kaiser Permanente's San Francisco Medical Center, for example, claims it provides $24.3 million in community benefits. However, it provides details on just $568,000 of that spending, according to the report. St. Mary's Hospital claims to provide $51 million in community benefits, but more than $20 million of that is tied to alleged shortfalls in Medicare payments.

"Not-for-profit hospitals are supposed to operate for the benefit of the community in exchange for the huge tax break they get...when we looked at publicly available data, we found there's no way to tell how most community benefit dollars are spent, whom they help or even if all the spending claimed as community benefit is real," said Greenlining Institute Health Policy Director Carla Saporta in a statement.

Not-for-profit hospitals have come under more pressure in recent years to justify their community benefits expenditures in order to justify the tax-exempt status that they receive. The Internal Revenue Service has been investigating practices among hospitals, and some states, such as Illinois, have even tried to eliminate property tax exemptions for some hospital operators that did not report providing enough community benefits.

A representative from the Bay Area region's primary hospital lobbying group said the data had been recycled from a previous report that was issued in support of failed legislation intended to reform charity care report. "They are targeting three amazing nonprofit hospitals that serve residents of San Francisco and contribute millions to the community," said David Serrano Sewell, a regional vice president with the Hospital Council of Northern and Central California.

To learn more:
- check out the Greenlining Institute report (.pdf)
- read the statement

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