Thread regarding Ascension Health layoffs

• Researchers at Yale, University of Pennsylvania, Carnegie Mellon and the London School of Economics looked at how nonprofits charge, and found they don’t price any less aggressively than for-profits, a finding that prompted study co-author Zack Cooper, of Yale, to write: “We subsidize not-for-profits to the tune of $30 billion annually, in the form of tax exemptions, and we have to ask what that money is getting us?”

• Not much.

• But it could.

• A few years ago a business columnist at the Orlando Sentinellooked into what Advent Health (formerly Florida Hospital) and Orlando Health, another nonprofit hospital in the same community, would pay in property taxes in just five Central Florida counties. The reporter found that if these institutions paid property taxes alone, the community would net an additional $45 million a year.

• In a mid-sized metro like Orlando, $45 million would pay for a lot of schoolteachers, police officers, and, yes, community health care and financial aid for those who need it.

• But instead the community has seen medical costs go up, property taxes increase, health systems get bigger, and healthcare executives get richer.

https://www.medicaleconomics.com/view/how-nonprofit-hospitals-get-away-biggest-rip-america

“We are alarmed by reports that despite their tax-exempt status, certain nonprofit hospitals may be taking advantage of this overly broad definition of 'community benefit' and engaging in practices that are not in the best interest of the patient,” wrote the lawmakers. “These practices — along with lax federal oversight — have allowed some nonprofit hospitals to avoid providing essential care in the community for those who need it most.”

• More than half of the approximately 5,000 community hospitals in the United States operate as private, nonprofit organizations.

• Under IRS rules, nonprofit hospitals may qualify for tax exemptions on the basis of providing charity care and community benefits.

• One study estimated that these exemptions were worth $28 billion in 2020.

• However, recent reporting has revealed that some nonprofit hospitals have been engaging in practices that are not in the best interest of their patients, including WAGE GARNISHMENT and HOME FORECLOSURES to force payments by low-income patients, and even the DENIAL OF MEDICAL CARE.

https://www.taxnotes.com/research/federal/legislative-documents/congressional-tax-correspondence/senators-call-for-tax-exempt-hospital-investigation/7h228

It's about time.

• The senators also pointed to a study of more than 1,700 nonprofit hospitals that found that 77 PERCENT SPENT LESS on charity care and community investment than the estimated value of their tax breaks.

https://www.beckershospitalreview.com/legal-regulatory-issues/lawmakers-push-irs-to-probe-nonprofit-hospitals.html

OFFICIAL LETTER:

https://www.cassidy.senate.gov/imo/media/doc/warren_letter.pdf

Wow. More here:

https://www.statnews.com/2023/08/08/senators-nonprofit-hospital-probe/

• WASHINGTON — A bipartisan group of senators wants federal tax regulators to probe nonprofit hospitals’ compliance with community benefit requirements, ratcheting up a longtime campaign to hold the tax-exempt providers accountable.

• Nonprofit hospitals are often subsidized by state or federal funding and exempt from many taxes.

• In exchange, they are required to aid their surrounding area through public health programs and providing free or discounted care to low-income patients.

• However, advocates have long argued that the tax code’s broad definition of community benefits has hospitals logging costs like physician training and research rather than direct community benefits like health screenings, free clinics, and care for the uninsured.