CHICAGO - Illinois hospitals provided $704 million in charity care as part of $5.2 billion in annual "community benefits," according to the Illinois Hospital Association's latest review of hospitals' annual filings.

The community benefits were provided by more than 100 hospitals that file an annual report on those benefits with the state attorney general's office, according to the association. Hospitals under 100 beds are not required to file the report.

The charity care figure marks a 182% increase since 2005, the association said.

The cost of charity or uncompensated care, underpayments for services by Medicaid and Medicare, unpaid patient debts, donations, unreimbursed costs for training medical professionals, research, screenings, and subsidized emergency and trauma care count toward "community benefits."

Charity care is defined as free and discounted care provided to patients unable to pay.

The association included the information in its State Economic Impact report published Monday.

The report asserts that hospitals and healthcare systems produced a local and state economic impact of $83.4 billion in 2012 with the industry supporting more than 450,000 direct and indirect jobs.

The economic impact from payroll alone is $38.6 billion while hospitals spend $14.6 billion on goods and services. Hospitals also spent $4.2 billion on infrastructure including work on buildings and equipment.

In 2012 and 2013, more than one in three Illinois hospitals operated in the red. "Financial instability is a statewide problem," the report said.

The sector's fiscal instability stems in part from what the report says is an $11 billion reduction in Medicare payments over ten years under federal health care reform and other legislative and regulatory actions. The cuts are further exasperated by $380 million in state Medicaid reductions since 2011.

"Any further Medicare and Medicaid cuts will undermine hospitals and health systems as they create jobs and transform health care delivery," association president Maryjane Wurth said in the report.

The state's 2012 Medicaid overhaul included new rules governing how much charity care and other community benefits not-for-profit hospitals must provide to keep their property tax exemptions. The legislation was part of a compromise to end a state crackdown that sought to strip some hospitals of their exemptions for failing to provide sufficient free or discounted charity care.

Under the new rules, all not-for-profit hospitals are required to show that they provide sufficient qualified services at a level equal to or greater than their assessed property tax liability.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.