Charity for Whom?

Health Care
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Little Rock      Representatives from ACORN, Local 100 United Labor Unions, Labor Neighbor Research & Training Center, and the Arkansas Community Organizations stood in front of St. Vincent’s Hospital in Little Rock.  The same group was front and center at Ocshner Baptist Hospital in New Orleans along with leaders from A Community Voice, ACORN’s affiliate in Louisiana.  In Houston, Local 100 representatives stood in front of the Methodist Hospital.  They were all there to release a path-breaking report entitled “Charity for Whom?” about these hospitals and more than 130 others in Arkansas, Louisiana, and Texas and their record in providing charity care to lower income and working families in the three-state area.

Each of these three hospitals provided less than 2% of their gross revenues in charity care, while enjoying the benefits of tax exemption as federally classified nonprofits, dedicated to charitable practices.  Tragically, they were not alone.  Most hospitals in their states were as bad, worse, or not much better.  In fact, the report indicated that if all of the hospitals in these areas provided even as little as 5% of their gross revenues to actual charity, then more than one-billion dollars of additional charity care would be provided to more than one-million more people!

“Charity for Whom” came out of a five-year investigation of publicly available documents nonprofit hospital are required to file with the IRS.  The partners in the Nonprofit Hospital Accountability Project, Local 100 United Labor Organizations, ACORN International, and LNRTC, came together after the passage of the Affordable Care Act.  The impetus was an amendment to the Act developed by Senator Chuck Grassley (R-IA) that demanded that nonprofit hospitals provide increase charity care or potentially lose their tax exemption with the IRS in charge of assessing their performance.  The Act passed in 2010, and hospitals were given five years to get their act together for this amendment to take full force.

The Project was designed to see how well they did.  The short answer is poorly on just about all counts by all involved.  Charity care has actually decreased since ACA passage throughout the country.  Tax-exempt nonprofits hardly do better on average in providing charity than for profit hospitals.  The IRS has only stripped the tax exemption of two hospitals that we can determine, one for not posting required notices and one for being for profit, but pretending otherwise, and none for giving too little charity.  This despite the fact that the annual report by the IRS indicates that a huge percentage of these hospitals are subject to additional examination after they file.  The IRS refused to respond to FOIA requests by the project asking for the names of other hospitals investigated.  We found that a significant number of hospitals are in fact not filing or not reporting their charity care at all.  Hospital CEOs were paid millions in many cases, but not managing for their mission, and in some cases making more in their pay envelopes than they provided in charity.

The report calls on the hospitals to do more charity or surrender their tax exemptions.  It calls on the IRS to penalize hospitals for nonreporting or strip the tax exemptions for poor performance.  It calls for public authorities and politicians at all levels to demand accountability from these institutions and more charity care or to revoke tax exempt privileges.

There is much to be done here, and the release of the report signals the beginning of a campaign that will not end until there is real change and open-handed charity.  Peoples lives depend on it!