Will Nonprofit Hospitals Have to Defend Their Tax Exemptions Next?
SUJA AMIR AND STEVE DUBB | December 05, 2017
An opinion piece in Stat by Haider Warraich, a cardiologist at Duke University Center, suggests that if nonprofit hospitals knew what was good for them, they would begin to live up to the spirit of their tax status far more substantively and assertively. As Warraich explains:Despite decades of efforts by for-profit entities to take over the hospital sector, it is noteworthy that nonprofit hospitals retain a dominant market position. And this difference does matter. A year ago, the Pittsburgh Gazette’s Sean Hamill, who has certainly been critical of nonprofit hospital practices, nonetheless noted that nationally nonprofit charity care (2.2 percent of revenues) was double that of for-profits (1.07 percent of revenues). But this doesn’t mean that the concerns that Warraich raises lack merit.The debate over nonprofit hospitals has been covered in NPQ for years. Indeed, NPQ covered the IRS case that Warraich mentions, as well as a case in New Jersey last year where local governments joined forces to sue 35 hospitals in an attempt to collect payments through property taxes for city services.” Some hospitals settled on making payments in lieu of taxes. As NPQ noted at the time, “Trinitas Regional Medical Center in Elizabeth, N.J., [agreed to] pay $250,000 per year from 2016 to 2019, an amount that will be revisited in subsequent years. And the JFK Medical Center in Edison, New Jersey [agreed to] pay $500,000 a year in community fees while keeping the whole of its property tax exempt.”