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The Battle Over Hospitals' Tax-Exempt Status Heats Up In Illinois

Chicago News Cooperative:  "State Challenges Hospitals' Tax Breaks."
“Hospitals think they should get tax exemptions for merely what they do in the community,” said John Colombo, a professor of law at the University of Illinois at Urbana-Champaign who has followed the issue of nonprofit hospital tax exemptions nationally. “It’s problematic: The overall number that each of these hospitals is reporting is abysmally low. Given the state of the economy, one would expect the charity services going up.”
“Hospitals aren’t poorhouses anymore,” (says Colombo.)  “Just because they were exempt in 1900 doesn’t mean they should be exempt in 2011. The world is different.”
Yes, the world is different in 2011, especially when for-profit Vanguard Health Systems can buy 4 hospitals in the Chicago area, pay taxes AND deliver charity care in amounts "not materially different" from their tax-exempt, not-for-profit competitors.

I don't think anybody (even Illinois' tax authorities) begrudges a "no margin, no mission" mindset.  But to my NFP brethren in Illinois, I'll simply say this: if you wish to be thought of as a charity, then act charitably. 

In case you're unclear on the concept, let's return to the source - Merriam-Webster:

Char-i-ty.  A noun, meaning (1) benevolent goodwill toward or love of humanity, or (2) generosity and helpfulness, especially toward the needy or suffering.

The more you act like any other business (even one that just happens to deliver a social good like health care) the more you'll be treated like any other business.  That is to say rudely, at arms' length and  'just show me the money.'   But fair's fair since that's pretty much how indigent patients feel leaving your ER.

One percent of revenues devoted to charity care?  I'm not sure where lies the tipping point between business and charity, but c'mon.  That falls on the side of  'caught red-handed.'


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