The Virginian-Pilot had a front page article Sunday on the tax breaks for providing charity care. What they found was pretty amazing:
A Virginian-Pilot analysis of statistics gathered by Virginia Health Information, a nonprofit group, found that nonprofits statewide provided charity care equal to 3.3 percent of gross patient revenue in 2005. For- profits’ rate was 1.9 percent.
With so many people lacking health insurance, the numbers seemed a little low to me. The article details the reason why the numbers are so low:
To some advocates for the poor, charity care seems one of the best-kept secrets in the Virginia health system. In 2005, a team of Legal Aid lawyers did a telephone survey of 20 Virginia hospitals, asking about their charity care policies. They reported that the information was “exceedingly difficult” to obtain.
“No average patient, let alone a patient with a health problem or disability, could be expected to spend the time and energy that it took to obtain this information,” the team wrote. “It is one thing to have financial aid and charity care policies in place; it is quite another to make them accessible to the public.”
So while programs exist, getting the information is extremely difficult. As the result, many of those eligible end up with bills they cannot pay, which the hospitals pursue via the courts. The article reports that “recent studies have found that medical debt is a major factor in at least 50 percent of bankruptcy filings.”
I don’t know how we got here. It seems to me that there should be some requirement that non-profit hospitals spend a reasonable amount of their revenues on taking care of the poor. I don’t see 3.3% as reasonable. The fact that the IRS has no specific requirement is ridiculous. Health care is big business, and if the government wants me, as a taxpayer, to subsidize the operation, at the very least there should be some minimum amount of charity required.
Right now, the best we can do is to urge our legislators to take up the cause by passing legislation like that in other states:
Some states have passed laws requiring hospitals to notify patients of their charity care programs and determine eligibility for free care before filing collection lawsuits. Virginia has no such requirements.
I’ll take that even further. Virginia law should notification to patients of the availability of charity care prior to the providing of services. Such notification should include posters and fliers in the waiting room and as a part of the admissions process, a signature indicating that the information has been provided to the person who is accepting financial responsibility. Perhaps admissions personnel could ask a few financial questions in order to flag the file of the patient for followup with a financial counselor.
Universal health care may or may not be a part of our future. Until that happens, the non-profit hospitals should make their charity care programs easily accessible and stop sending already financially fragile patients into even worse situations.
Either that or give up your non-profit status. Because if you aren’t willing to be charitable, neither should we as taxpayers.
VIVIAN J. PAIGE | All Politics is Local 
I don’t see what the big deal in this debate is. The charitable care programs at non-profit hospitals ALREADY EXIST. We’re not talking about a new program here; we’re simply talking about making sure that people are aware of the programs that exist so that they can use those programs to pay for their medical care, rather than bankrupting those patients and leaving it up to you as an individual to offset their unpaid costs through your insurance premiums and tax dollars.
So why all the pushback? I thought even Republicans were in favor of informed consumers and taxpayers?
Vivian, what I am saying is that there should be NO requirements on charities from the government. They should get no tax breaks, either.
You know what states operate with those guidelines on taxes and charities, generally speaking?
Welfare states. Rather than encourage charitable giving by making it tax deductible and keeping non-profits outside the corporate tax structure, the state pays for everything.
Personally, I prefer it when people are free to have the option to give money to their local church’s food closet and deduct it from their taxes so that their money benefits the local community rather than letting politicians and bureaucrats in Washington decide how to spend it. But hey, to each his own.
The “push-back” is not about the consumer education, but about the claim that the hospitals are “not doing enough.” There seems to be very little slop in the budget. The excess earning from one year a carried forward against a possible loss the next. This is far more efficient than going into debt hoping for a gain the next year to pay it off.
I understand your point about excess earning, Mouse. What I don’t understand is how that relates to an organization with non-profit Federal tax status. I can’t think of a non-condescending way to point out what ought to be obvious: non-profits aren’t supposed to be making a profit.. If you are making a 5.2% profit on your care and aren’t reinvesting all of it back into charitable care, you’re not a non-profit–you’re a moderately-growing for-profit business.
But in any case: I’m glad we’ve found common ground on agreeing that hospitals should absolutely inform patients about their full range of options regarding their medical care with respect to already existing charitable care programs.