Hospital Administration

Hospitals No Longer Non-Profit?

1 Mins read

Hospitals in the United States are a mix of for-profit and non-profit entities. The latter group gets a big benefit in the form of being exempt from taxation. To qualify, well, your organization has to be deemed a charitable organization, but that definition has never really been established or enforced.

Hospitals in the United States are a mix of for-profit and non-profit entities. The latter group gets a big benefit in the form of being exempt from taxation. To qualify, well, your organization has to be deemed a charitable organization, but that definition has never really been established or enforced. Consequently, hospitals are more or less on the honor system to provide a sufficient level of uncompensated care and other services that are collectively termed “community benefit.” The provision of this community benefit translates into non-profit status, which again, means exemption from taxation.

However, at least one state is cracking down on hospitals that appear to be gaming the system by enjoying the tax-exempt status of a non-profit without providing a meaningful level of community benefit. According to Bruce Jaspen, the state of Illinois has had enough. Their budget is tight, and they could use the revenue, so they rescinded the non-profit status of one hospital last year, are working to do the same with three more hospitals this year, and may eventually target more than a dozen additional hospitals across the state. It makes tremendous sense. After all, if you’re acting like a for-profit hospital, you should be treated like a for-profit hospital.

Budget issues are not unique to Illinois, and I highly doubt that non-profits behaving like for-profits are unique to Illinois either. Figuring out how to define, measure, evaluate and monitor community benefit levels in hospitals could become big business as states consider ways to generate more revenue.

 

Related posts
Hospital Administration

How does NHS procurement operate?

2 Mins read
The National Health Service (NHS) is the backbone of the UK healthcare system, publicly funded and available to all residents of the…
Hospital Administration

Things To Consider Before Becoming A Locum Tenens Hospitalist

2 Mins read
A flexible schedule, great exposure, excellent professional opportunities, tax benefits, a handsome salary, and opportunities to travel- owing to the infinite benefits…
Health careHospital Administration

How to Advocate For Yourself In and Out of the Hospital

4 Mins read
We often look at doctors and health care professionals as the ultimate experts, and in most cases, they are. Doctors and nurses…