html
Printed from the Charlotte Observer - www.CharlotteObserver.com
Posted: Sunday, Apr. 22, 2012

Tax breaks save nonprofit hospitals millions

By Ames Alexander
Published in: Prognosis: Profits
  • Prognosis: Profits

    A five-part series examining how N.C. hospitals profit at the expense of patients.

    Sunday: Nonprofits very profitable

    Monday: Charity care lacking

    Tuesday: Suing the needy

    Wednesday: Staying strong in Raleigh

    Thursday: Policies that could help


  • Related Images

    All but eight of North Carolina’s more than 100 general hospitals are nonprofits.

    That means they pay no state or federal income taxes and no real estate taxes on hospital-related properties. They also get rebates from the state to compensate them for all sales taxes they’ve paid. Collectively, those tax breaks save them hundreds of millions of dollars each year.

    Contrary to what the name suggests, most nonprofit hospitals bring in more money than they spend. But they’re required to put the extra money back into their operations.

    In exchange for their tax exemptions, nonprofit hospitals are expected to provide benefits to the communities they serve.

    “There’s a high expectation that nonprofits belong to the public,” says Jessica Curtis, who heads Community Catalyst’s Hospital Accountability Project in Boston.

    Virtually all hospitals, nonprofit and for-profit, provide charity care to the poor and uninsured. Both kinds of hospitals also lose money treating Medicaid patients and those who don’t pay their bills. They usually make up for those losses by marking up charges for patients with private health insurance.

    Through tax-exempt bonds, many nonprofit hospitals can also borrow money at low rates.

    As a public hospital authority, Carolinas HealthCare also has the power of eminent domain, which means it can demand that property owners sell at a fair market value to make room for hospital projects. Hospital officials say they’ve never used that power.

    For-profit hospitals do pay taxes. They’re expected to generate profits and to return much of that money to shareholders.

    Staff Writer Karen Garloch contributed.

    Subscribe to The Charlotte Observer.

    Hide Comments

    This affects comments on all stories.

    Cancel OK

    The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

    Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

      Read more