Hospitals praise IRS reporting of charity care

With increasing scrutiny of executive pay at nonprofit hospitals, recent tax forms reveal not only the salaries of top leaders but also the amount of charity care that hospitals provide.

For example, although the biggest nonprofits in Akron, Ohio, doled out some six- and seven-figure paychecks, they also spent about $28.1 million last year in charity care, reports the Akron Beacon Journal.

With this year's tax forms for 2010, nonprofit hospitals, including Summa Health System, Akron Children's Hospital, and Akron General Medical Center, must provide additional information through an IRS form, Schedule H, that outlines how much charity care and community benefits the organizations provide.

"Hospitals welcome the opportunity to tell the story to their communities about all the different ways they are serving their communities," said Ohio Hospital Association spokesperson Mary Yost. "It's not just in charity care that they provide. It's in the medical research that they engage in that leads to better treatment and cures. It's their work in training physicians to make sure they're going to be there in the future to care for people when they need medical care. It's providing some of the resources to help people be healthier and reduce their dependence on medical care."

Although some nonprofit execs might cringe at the idea of publicly reporting, Children's Executive Vice President said, "I think it's good for us to have this data to prove that we're entitled to tax-exempt status, both from a federal and state standard." He added, "I think it paints a very clear picture."

According to the article, Children's President and CEO William Considine received compensation and other benefits that totaled $1.56 million in 2010, while the hospital provided $65.3 million--about 15 percent of its expenses--on community benefits. Summa Health System President and CEO Thomas J. Strauss received compensation and a bonus worth 1.41 million, while the system spent about $91.2 million--9.5 percent of its expenses--on community benefits. And Akron General paid $677,267 to Alan J. Bleyer, who retired as the hospital's leader in 2009, $983,744 to interim CEO Michael Rindler, and $568,605 to Vincent J. McCorkle, who took over as president and chief executive on July 1, 2010. Akron General also spent nearly $43.5 million--a tenth of its total expenses--on financial assistance and other community benefits.

The uncompensated care and community benefit numbers through IRS Schedule H might help offset possible backlash against the million-dollar executive paychecks.

For more information:
- read the Akron Beacon Journal article
- check out FierceHealthFinance's special report, "Are nonprofit hospital execs paid too much? Seven 7-figure paychecks"

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