Nonprofit hospitals don’t contribute enough charity care to warrant their tax-exemption, according to a new report from the Institute for Wisconsin’s Future.
The IWF said that the state’s 124 nonprofit hospitals are not required to pay about $117 million in annual property taxes, which shifts the burden on to local businesses and homeowners to make up the difference.
“While nonprofit hospitals argue their charitable work justifies their tax exemptions, the fact is that many large nonprofit hospitals are indistinguishable in their operations from for-profit hospitals. Executive salaries, charitable care, and annual revenue surpluses are every bit the same in the big nonprofit institutions as in comparable for-profit ones,” the report reads.
The Wisconsin Hospital Association fired back, accusing the organization that receives support from local unions of presenting an unfair analysis of non-profit hospitals’ charitable work.
“The reality is that Wisconsin’s nonprofit hospitals provide over $1 billion in community benefits, or 10 times the amount that IWF says could theoretically be collected in property taxes. Of that total, $182 million is charity care provided to those who cannot afford to pay for the services they receive,” the association said.
The WHA said hospitals further provide more than $500 million in uncompensated Medicaid services because they are repaid a rate below the cost of services. For-profit hospitals have no obligation to serve Medicaid patients.