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(Some) Illinois Hospitals Losing Tax-exempt Status

From the Chicago Tribune and AP.

The decisions were announced to the hospitals Tuesday morning, Revenue Department officials told The Associated Press. They follow last year’s Illinois Supreme Court ruling that found a central Illinois hospital wasn’t doing enough free or discounted treatment of the poor to qualify for an exemption, costing it $1.2 million in local property tax payments per year.

In addition to Prentice Women’s Hospital [a Northwestern facility] in Chicago’s Gold Coast neighborhood, the revenue department now has decided that Edward Hospital in Naperville and Decatur Memorial Hospital in Decatur don’t quality for property tax exemptions. The hospitals have 60 days to ask an administrative law judge to review the decisions. In Illinois, property taxes are collected by county governments, and the Department of Revenue decides which institutions are eligible for tax exemptions.

In a written statement, Illinois Hospital Association President Maryjane A. Wurth said she was disappointed and “deeply concerned” by the Revenue Department’s preliminary rulings, and worries that the hospitals will be forced to reduce services and increase costs for patients and employers.

It’s neither surprising nor inappropriate that state policymakers are holding hospitals to account.

large research literature documents that while some nonprofit hospitals provide great community benefit, many provide very little. Many nonprofit hospitals implicitly or explicitly decline to treat poor people, determine everything from their location to their service mix to maximize economic gain, even if this gain is not, strictly speaking, distributed as profit. Many of these same hospitals perform little medical research or other valuable activities that might merit implicit or explicit state support.

As someone who cares about the future of the medical safety-net and urban teaching hospitals, I’d trade the loss of nonprofit prerogatives for fair and timely Medicaid reimbursement. Our hospital, and others that really carry the load, is being badly damaged by Medicaid’s low reimbursement rates and other program problems. Unfortunately this will not get any better in a state experiencing very serious budget deficits and governance difficulties.

I suspect that we are heading for the mother of local political fights. I can’t imagine that these hospitals–and others in the crosshairs–will take this lightly.

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He is a contributor to Taking Note, the group blog of The Century Foundation, and the Reality Based Community.

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4 replies »

  1. he will make health care abailavle to all Americans and it is about time it happens, no one should be thrown out of their hospital because their health care has run out, I could not believe it when I seen on CNN just the other week how some hospitals in the USA closed their cancer units even to those who were in the mist of treatment because they said it was not cost effective. Who in the states own the Hospitals anyway are they not state owned (as the people in the US own them) The states being the most powerful country in the world are just letting people die all in the name of greed.Thank God I live in Canada as all are covered by health care here. while it is not completly free we do have to pay $900.00 a year those who can afford it if you can’t afford it you still get the same treatment. I think all Americans should see the Movie called SICK 0 BY Micheal Moore. perhaps then you will fight for you health care that Obama wants to bring in and the Clintons before him ..

  2. For an article I’m writing about hospital tax exemptions, I’d like to get Mr. Pollack’s and NotMD’s viewpoints on the record and use your names if you’d like to share them. Thank you!

  3. follow this scenario..

    hospital A does not invest in getting people covered into the medicaid program and uses software to make it easy to declare charity care..result high charity care writeoffs..less people with insurance..more use of the emergency room

    hospital B invests in staff and aggressively pursues coverage for the patient so they can see doctors and get prescriptions filled and be assigned a PCP..less charity care write offs..higher conversions to state program..people receiving the right care in the right location..

    which hospital is doing the right thing?

    by pushing hospitals to have higher charity care ,you are actually hurting the majority of the patients in their long term care needs..charity care is not insurance and creates an incentive for patients not to be enrolled in a program..i thought we are trying to improve the quality of health care and reduce admissions?..

  4. Today’s reimbursement will look like manna from Heaven compared to that which is to come undr your vaunted ACA.

    It will be affordable, but there will be no care. Care plans and algorithms don’t cut it, but they are cheap. They will lead to cheap drugs. Cheap tests and wrong answers.

    “Social Service Administration”? Is that a joke?

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