Many California nonprofit hospitals reap expansive tax breaks far beyond what they return to communities.
Using hospitals' public data, the Institute for Health and Socio-Economic Policy, research arm of the California Nurses Association, disclosed that in 2010 alone California nonprofit hospitals received more than $1.8 billion in government subsidies and benefits above what they delivered in charity care.
Some hospitals meet the promise of their tax status. Others, including some of the state's wealthiest, provide minimal levels of charity care while recording huge profits and paying lavish executive salaries.
The consequences for a state hurting from revenue shortfalls are significant. Struggling California cities and counties also lose more than $1 billion a year from the hospitals' tax exemptions.
If this is news to Bee readers that's because The Bee chose not to report on the legislative hearing where it was presented, opting instead to attack the hearing in a commentary in Dan Walters' Aug. 22 column "A 'hearing' that was a charade."
The California Hospital Association hopes the Legislature will ignore this abuse, and while The Bee failed to inform readers, it's not just the nurses who have pointed out the problem.
The hearing followed release of a California state auditor report citing a wide disparity in what nonprofit hospitals report in uncompensated care and what hospitals consider charity care.
Had The Bee reported specifics of the hearing, readers might have heard the testimony of principal auditor Grant Parks who noted "state law is fairly permissive on what can be counted as community benefit It's like the Wild West of what is required."
Or State Board of Equalization member Betty Yee, who noted many nonprofit hospitals provide "significantly less" charity care than do for-profit hospitals.
Or Ellen Shaffer, director of the EQUAL Health Network, who explained that unlike California, 11 states can suspend tax-exempt status, and that Texas and Alabama require specific thresholds of charity care a nonprofit must provide.
Nurses emphasized that patients pay the price when hospital giants cut patient services they think are not profitable enough. Sutter and Kaiser have among the worst percentage in charity care while cutting care for vulnerable populations.
California should follow other states in requiring a mandatory minimum level of charity care for tax exempt status, clearly define what constitutes charity care, and improve reporting requirements.
Californians, who count on these hospitals when they need 24-hour nursing care, have a right to expect they will not abuse their community responsibility just because they have considerable pull with many legislators.