Report: Illinois Hospitals Provided $4.7B in Community Benefits in '08

CHICAGO - Not-for-profit hospitals in Illinois - on the defensive over the level of charitable care they provide to warrant their tax-exempt status - provided $4.7 billion in community benefits in 2008, according to the latest report from the Illinois Hospital Association.

The third annual report offernig an overview of the community benefits provided by hospitals through various services and programs, entitled "Illinois Hospitals Caring for Their Communities: More Than You See," was released yesterday. The data comes from 109 hospital reports filed with the state under the Illinois Community Benefits Act.

"As this report shows, the true worth of hospitals cannot by measured by a spreadsheet. Our hospitals' programs and services reach out into their communities to those in need," IHA president Ken Robbins said in a statement. "There is a lot of discussion about measuring the worth of hospitals to their communities, and this report shows the multitude of ways Illinois hospitals are helping more people than ever before."

The $4.7 billion includes $2.24 billion to cover the difference between the cost of providing Medicare and Medicaid services and lower reimbursement levels; $1.15 billion in unpaid health care services; $420 million in free and discounted care; $365 million to educate future providers; $304 million to subsidize services that are not profitable, like trauma and burn units; $78 million on research; $94 million in donations and volunteer services; and $14 million in language assistance services.

The IHA noted that the $420 million in uncompensated care represents an increase of 68% over the last four years. The report also noted that the $4.7 billion figure would have grown by another $1 billion if the benefits of all of the state's 210 nonprofit hospitals were included.

Some hospitals are not required to file the state report. The IHA also pointed out that hospitals contribute $72 billion annually to the state's economy, including $13 billion for salaries.

Illinois hospitals have been a focal point of heightened local, state, and federal scrutiny over whether nonprofit facilities warrant their various exemptions from taxation. The state has challenged the property tax exemptions of several hospitals and Attorney General Lisa Madigan has proposed setting minimum charity-care thresholds.

A report issued earlier this year by the Center for Tax and Budget Accountability asserted that Chicago-area hospitals enjoyed an estimated $498 million in tax-exemption benefits annually while collectively providing just $176 million in charity care.

The study found that the hospitals did increase their charity care by $40 million over the last three years, but the value of their tax breaks grew by $94 million during the same period. The IHA has countered that the sum of all community benefits should be considered when weighing the balance between services provided and tax benefits.

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Healthcare industry
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