CHICAGO — Illinois hospitals pump more than $75.1 billion into the state’s economy annually and provide about $4.9 billion in community benefits, including $500 million in charity care, a new report from the Illinois Hospitals Association asserts.
The association’s report seeks to underscore the importance of the health care sector’s contributions to the local economy at a time when Medicaid and other health care-related spending cuts are under consideration at both the state and federal levels as a means to trim budget deficits.
“To continue to retain and create jobs, attract businesses to their communities, and provide access to high-quality health care services, it is critical that Illinois’ hospitals have the funding support they need to remain fiscally healthy,” said the association’s president, Maryjane Wurth. The report is available at www.ihatoday.org/economicreport.pdf.
The association released the report on Friday at its annual leadership summit and presented it to attendees Gov. Pat Quinn and his Republican opponent in the November governor’s race, state Sen. Bill Brady of Bloomington.
“We urge state and federal lawmakers to take steps to continue to invest in the state’s health care system to ensure that hospitals remain strong and viable employers in their communities,” Wurth said.
In addition to their primary role of providing health care services, the state’s hospitals generate $75.1 billion in economic activity through direct spending, capital expenditures, payroll, and spending by their employees and suppliers, according to the report.
The 200 hospitals that are represented by the association, including about 150 not-for-profit hospitals, employ more than 250,000 people who receive $14.8 billion in wages and benefits.
In almost half of the state’s counties, hospitals are among the top three employers.
The health care sector directly spends $13.3 billion annually on goods and services for patient care. The report also promotes the Medicaid program as a major economic stimulus as additional federal matching funds flow into state and hospital coffers through the state’s provider tax on hospitals.
Hospitals spent about $3.2 billion on buildings and medical equipment last year, many tapping the tax-exempt market to fund their projects and purchases.
The sector’s overall estimated economic contribution accounts for 6.8% of the state’s gross domestic product, and the sector is expected to create the greatest number of new jobs in the coming years.
About 100 of the state’s not-for-profit hospitals that must report charity care benefits to the state provided nearly $4.9 billion of community benefits, including $500 million in charity care last year. That figure is up slightly from $4.7 billion reported in 2008, according to the report.
The association includes charity care, uncompensated care, subsidized services, medical research, education and training of health care professionals, and underpayments for Medicare and Medicaid patients as community benefits. Most not-for-profit hospitals must submit annual reports to the state to show they warrant their tax-exempt status under the Illinois Community Benefits Act.
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 last year by the Center for Tax and Budget Accountability said that Chicago-area hospitals enjoyed an estimated $498 million in tax-exemption benefits annually while collectively providing just $176 million in charity care.