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Not-for-Profit Hospitals unfairly receiving Tax Exemptions

In this era of tight public funds afflicting virtually every state in the nation, there is one revenue source that has been all but neglected in the public debate: the subsidy of “not for profit” private hospitals by exemption from sales and property taxes being the typical form.

This has been reexamined by the remarkable Illinois supreme court decision in the Provena Covenant case: the Court ruled that the Provena hospital group failed to meet the charitable health care provision required to enjoy the property ands sales tax freedom they had enjoyed.

Illinois law requires non profit hospitals to provide charity care (free or reduced care) which eases the financial toll on government- and nothing less- to qualify for property tax exemption. When non profit hospitals fail to provide charity, some poor, uninsured, and underinsured patients find themselves in public hospitals funded by public dollars and stretched beyond capacity. This failure to meet legal requirements results in the loss of tens of billions of tax dollars across the nation at a time of great national need.

Other patients afraid to incur debt they can’t repay, delay their medical treatment, adding to its eventual cost and jeopardizing their health outcomes if not their lives.

In the current recession, budgets at every level of government are strained and people are in peril. The Illinois Supreme Court has decided that non profit hospitals must deploy the public funds they are given to support the public health safety net both the poor and the taxpaying public deserve.

Dr. Quentin Young is the Chairman of the Health and Medicine Policy Research Group

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Dr. Quentin Young

Dr. Quentin Young