Charity care and community benefit
September 20, 2011
There has been a lot of discussion lately about the tax-exempt status of Illinois hospitals. I wanted to share with you our perspective on this issue and invite you to share your thoughts with me.
As I mentioned in a post on this subject about a year ago, “community benefits” constitute the legal justification for Children's Memorial's tax-exempt status, as well as demonstrate the essential role we play in improving the health of the children and families we serve. Providing these community benefits is a core part of our hospital’s mission.
Recent media articles on the subject of community benefit have focused exclusively on the amount of charity care, or free care, that non-profit hospitals provide, while glossing over the necessary and critical direct benefits that these institutions contribute through participation in the Medicaid program.
Last year, over half of our inpatients were covered by Medicaid. This is due, in part, to the state's universal healthcare plan, All Kids. As a result, the number of children needing free care significantly decreased, giving us few opportunities to provide charity care.
We communicate to all families that charity care is available to them if they qualify for it. In fact, more than 90% of families who requested financial assistance this year qualified for it and received it.
Children's Memorial provided $100 million in direct community benefits this past year alone. Significantly, more than $61 million of the $100 million are losses Children's Memorial incurred as a result of Medicaid underfunding and low reimbursement rates.
The remaining $40 million in direct community benefits provided by Children's Memorial includes community clinic support, pastoral care, social work services, transplant family housing, and resident and fellow training, among other critical services.
We implore Gov. Pat Quinn, his administration and members of the General Assembly to make Medicaid losses and other direct community benefits part of the equation when determining a hospital's commitment to, and participation in, charity care. Our tax-exempt status is essential to our ability to care for the region’s most critically ill and injured children.
I would also invite you to view a video about our community benefits initiatives, and share your thoughts about this critical issue with me.