Many private nonprofit California hospitals, especially those that are part of big corporate chains like Sutter and Kaiser Permanente appear to be exploiting their tax-exempt status by accumulating huge profits, and handing top execs massive pay packages while providing scant charity care in return.

That’s the finding of a new report by the Institute for Health and Socio-Economic Policy, research arm of the California Nurses Association/National Nurses United, that was presented Wednesday in a Sacramento legislative hearing.

The nurses urged legislators to pass legislation to rein in the abuses by requiring minimum levels of charity care that all hospitals must provide to keep their tax exempt status, as well as more rigorous reporting requirements with real penalties attached for violators.

 
The findings were presented to a special California Senate Select Committee on Charity Care and Nonprofit Hospitals chaired by State Sen. Ellen Corbett.

In California, non-profit hospitals harvested more than $1.8 billion in government subsidies and benefits from their tax exempt status beyond what they provided in charity care in 2010.

The impact is especially severe on struggling cities and counties. They lose more than $1 billion as a result of the tax exemption of nonprofit hospitals, and what local governments pay directly to hospitals in their communities to provide hospital care for the poor.

Shockingly, many non-profit hospitals actually provide “significantly less” charity care than do for-profit hospitals, State Board of Equalization member Betty Yee said at the hearing.

Several of the state’s biggest and best known hospitals, Cedars Sinai Medical Center, Stanford University Hospital, and Sutter Health’s California Pacific Medical Center and Alta Bates Medical Center, are the biggest abusers in racking up government subsidies in the form of favorable tax benefits beyond what they give back in charity care. Read more…