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Report Ignores True Value of Chicago Hospitals
Date:4/10/2009

patients who qualify for charity care. But it criticizes hospitals, saying they should do "a better job of identifying patients eligible for charity care on the front end of the process." This is basically an accounting dispute, because, as the report notes, however you account for it, the care was still given, and the patient did not pay for it. Unlike businesses, hospitals do not ascertain whether a patient can pay before providing their services. They go to great lengths to inform patients of the availability of charity care by telling them verbally, through posted notices, brochures, and through mailed information.

The report acknowledges that hospitals provide benefits to the communities they serve that far exceed the value of their tax exemptions. It acknowledges that the hospitals studied provided community benefits of $2.14 billion, or nearly five times the value of CTBA's inflated estimated tax exemption value. The combination of the hospitals' charity care, Medicaid shortfall, and half of bad debt at cost is $600 million, whereas the report estimates the hospitals' tax-exemption value at only $445 million. "Any credible study would take into account the reality of the exemplary work that hospitals do to serve their patients and communities and to merit their tax-exempt status," said Metropolitan Chicago Healthcare Council President Kevin Scanlan.

The method used in the report for estimating property taxes is not the method actually used for hospitals currently on the tax rolls. Furthermore, the report fails to take into account the hospitals' Medicaid shortfall - the substantial difference between what the government pays hospitals and their actual costs for treating low-income and disabled patients. Even the IRS agrees that shortfalls in Medicaid payments should be recognized as a community benefit.

The basic premise of the report - comparing the value of tax exemptions and charity care and concluding t
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SOURCE Illinois Hospital Association
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