Tax exemptions keep nonprofit hospitals under the spotlight

BJC Healthcare, which operates Barnes-Jewish Hospital in St. Louis and 12 other facilities in Illinois and neighboring Missouri, reported operating earnings of $200 million in 2010 but paid no property taxes, reports the St. Louis Post-Dispatch.

The newspaper's examination of BJC's finances are part of a closer look such not-for-profit hospitals are receiving for being exempt from income, capital gains, and property taxes.

In addition to the operating income, BJC realized tax-free gains of $372 million from its investment portfolio and was exempt from local sales taxes on the purchases of hundreds of millions of dollars of medical supplies and equipment. Meanwhile, system CEO Steve Lipstein's pay package exceeded $2 million per year.

Altogether, BJC spends about 2 percent of its revenue on charity care. "As opposed to focusing on a dollar amount, I would hope that policymakers would focus on our hospitals' response to their communities," said Lipstein, who noted that BJC provides safety-net functions to a major city without a major hospital. "Tax exempt status shouldn't be linked solely to charity care."

Lipstein added that a revocation of BJC's tax exemption could lead to higher healthcare costs.

For more information:
- read the Post-Dispatch article
- read the BCJ community benefit report