Report: Charity care rising at Illinois hospitals

  • By Alex Parker
  • Staff Writer
  • July 15, 2009 @ 1:40 PM

Non-profit Illinois hospitals contributed nearly $4.7 billion in community benefits in fiscal year 2007-2008, a three-year high, according a report released yesterday by the Illinois Hospital Association.

The annual report, now in its third year, shows the 109 hospital filing community benefit reports with the state increased their charity care nearly 70 percent over the last four years. Hospitals provided $94 million in donations and other services, $365 million to educate health workers, $78 million on research and $14 million in translation services.

“As this report shows, the true worth of hospitals cannot be measured by a spreadsheet. Our hospitals’ programs and services reach out into their communities to those in need,” says IHA president Ken Robbins.

Twenty four hospitals in Chicago are included in the report, and some reported a boost in their community benefits output, which includes charity care, education, subsidization of money-losing ventures like trauma and emergency room services, and research.

Chicago hospitals contributed more than $700 million in community benefits, including six hospitals or health systems the report showcased:

  • Children’s Memorial Hospital: $100.6 million
  • Sinai Health System: more than $110 million
  • Rush University Medical Center: $172 million
  • Resurrection Health Care: $374.8 million
  • La Rabida Children’s Hospital: Data not available

Illinois hospitals contributed $3.7 billion in community benefits in fiscal year 2005, and $4.3 billion in 2006, according to previous reports. Some hospitals begin their fiscal year on Jan. 1, while others begin theirs at the same time as the state, July 1.

Rush University Medical Center reported a 27 percent boost in community benefits from fiscal year 2007, when it contributed more than $134 million. The year before that, fiscal year 2006, the hospital contributed more than $155 million. Resurrection provided more than $15.6 million in charity care.

Much has been made recently about how hospitals care for poor patients. In March, Gov. Pat Quinn signed a bill - Hospital Uninsured Patient Discount Act - that would cap the amount of money hospitals can charge poor patients. In January, Resurrection Health Care and Advocate Health Care settled lawsuits regarding overcharging patients.

IHA spokesman Danny Chun says the hospital discount law could affect the amount of charity care hospitals provide, citing the bad economy and higher unemployment.

“A lot of people are losing their health insurance coverage when they lose their jobs, and many of them don’t qualify for Medicaid,” he says.

The IHA report paints a rosy picture of charity care in the state, noting that member hospitals $420 million in free or discounted health care, a 68 percent uptick from four years ago.

But Heather O’Donnell, policy director for the non-partisan Center for Tax and Budget Accountability, says hospitals that receive tax benefits for charity care need to do more.

“Just because hospitals do many good things does not mean taxpayers and policymakers and elected officials should turn a blind eye to what the legal standard is for certain tax benefits,” she says. Non-profit hospitals receive tax benefits for providing charity care, but the law does not dictate how much charity care must be provided.

O’Donnell conducted a study this spring that showed non-profit hospitals in Chicago provide a low percentage of charity care when compared to their overall expenses. In 2008, she says, non-profit hospitals provided charity care equal to 2.2 percent of their expenses.

O'Donnell says wealthy hospitals should be contributing more to charity care. Her report notes that the University of Chicago Medical Center receives about $50 million more in tax breaks than they provide in charity care.

The university has been the subject of public outcry over plans to cut back on emergency room treatment provided to South Side residents.

“This is a very important issue for access to care for people who can’t afford care, and hospitals get public dollars to do this,” she says. “They ought to be held accountable.”

Last month, Cook County Commissioner Roberto Maldonado proposed an ordinance that would require county hospitals to spend as much as 4.5 percent of their annnual budget on charity care. The proposal was shelved until at least September.

Daily News Staff Writer Alex Parker covers public health. He can be reached at 773.362.5002, ext. 17, or alex [at] chitowndailynews [dot] org.