Business
When The “Nonprofit” Saints Go Marching In It’s A Taxpayer Shuffle
October 16, 2011 
A rather straight forward business story in the DAILY PAPER got our attention last week with a look at the tax return of St. Luke’s “nonprofit” medical center.
The hospital has been buying up private, for profit medical practices at a rate bound to get the attention of taxing authorities and consumers alike. In the past two years the hospital has acquired several hundred doctors, bringing total staff docs to more than 300.
A good number of these private docs were paying taxes and the offices they owned also were subject to property taxes. Now, it is a mish mash of rental agreements and ownership–much of which is tax exempt.
St. Luke’s has been expanding throughout Idaho, acquiring not only private practices, but also public hospitals such as the one in Jerome. It has been common knowledge one of the primary methods of remaining “nonprofit” is to keep building. The medical outfit is now the largest private employer in the state and made $725 million in revenues with expenses of $680 million.
Those numbers would translate into a $45 million PROFIT in most businesses.
Past reports show various staffers and executives with compensation near or above $1,000,000 a year. The nonprofit also made loans of $1.7 million in fiscal 2009 to docs and paid out more than $700,000 in “retention bonuses.”
With the Presbyterian Church on State Street getting taxed for space it rents to the YMCA, it would seem appropriate for the County Commishes to revisit the tax exempt status afforded both St. Luke’s and the other Saint–Alphonsus. Hospitals, clinics, and nonprofit doctor offices are growing like convenience stores did in the 70’s and their property is not being taxed.
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Comments & Discussion
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Oct 16, 2011, 4:07 pm
“Scores of Iowa hospitals are exempt from most taxes because they’re classified as charities, but some spend less than 1 percent of their money on free care for the poor, a Des Moines Register analysis shows.”
http://tinyurl.com/3j4aqb6
Governments, in theory, give not-for-profit hospitals tax exemption based on the understanding that a certain percentage of hospital expense will be “charity care.”
But the REGISTER newspaper in Des Moines, Iowa just did a study that reveals very little charity care is actually being done:
http://data.desmoinesregister.com/results/index.php?info=hospital_charity_care
Meanwhile, the State of Illinois has begun challenging the tax exempt status of some of its best-known hospitals:
http://www.nytimes.com/2011/09/11/us/11cnchospitals.html?pagewanted=all
Oct 16, 2011, 7:19 pm
You have taken to words right from my mouth. Well said.
Oct 16, 2011, 8:23 pm
Family Practice doctors are on the bottom of the income totem pole. I have heard about private doctors going under the wing of big name hospitals. They get paid a salary, don’t have the overhead nor the malpractice liability issues to deal with and add to that they can get a locked in work schedule.
Not a bad deal for a doc who does not want the hassles and worry of running a private practice.
Oct 17, 2011, 10:54 am
Dave,
Publish what St. Luke’s gives back to the community in unreimbursed care and unpaid benefit. I think you’ll be surprised.
EDITOR NOTE–That figure is subjective. Like the 752 good citizens who donate their time and talents to the hospital as volunteers. Hard to justify volunteers when some staff positions are reduced. The big issue is a nonprofit loaning $1.7 million to doctors. It is illegal for corporate sector to loan cash to staffers. We think a close examination of ALL nonprofits is in order.
Oct 17, 2011, 2:58 pm
By all means: Let’s see the dollar amount that St. Luke’s and all other major Idaho hospitals give back to the community!
That would be a pro-democracy move, wouldn’t it?
The exact dollar figures may already be available for public scrutiny.
Why?
Because the IRS earlier this year released the re-designed “SCHEDULE H” — part of the form 990 and section 501(r) documentation that not-for-profit hospitals are supposed to complete.
The IRS is advising hospitals that — for 2010 reporting — some parts of this re-designed form are *voluntary.*
http://blog.communitycatalyst.org/index.php/tag/schedule-h/
Nevertheless, shouldn’t tax-exempt hospitals to show some evidence that would more clearly explain to all stakeholders why tax-exemption should continue?
Democracy would seem to argue in favor of greater public disclosure.
Nobody is disputing that the hospitals do good.
However, as former President Reagan said:
“Trust; but verify.”
If we grant tax-exemptions to all multimillion (or multibillion) dollar organizations that do good, then doesn’t that suggest that only the “little people” will end up paying the tax bills in the end?
Oct 17, 2011, 5:19 pm
Some time back I submitted an email to the Guardian in which I calculated the assessed property values of St.Lukes downtown campus (by visiting the assessor’s office).
Just based on their downtown campus the Boise School District alone loses $ six figures due to their tax exemption.
Oct 17, 2011, 6:05 pm
Republicans don’t like to pay taxes, so why should hospitals?
Wonder how much the hospitals collect in sales tax on bandages and asprins? At $6.00/asprin that would be .36 cents.
I bet IACI would support the non tax position of hospitals since their #1 customer is Blue Cross.
Oct 17, 2011, 11:53 pm
Clpptcp, nothing is unreimbursed… they just shift the “free care” to the inflaited bills which they know are most likely to get paid. Ask them up front “how much?” and they say “what kind of insurance do you have and how much is your net-worth?” The county also pays for some “free care” too. It is what it is, but lets not kid around.
Oct 22, 2011, 11:55 pm
Charity? R U Kidding Me? When a hospital treats you and you have no way to pay, the hospital bills your county. They don’t give away jack (expletive deleted)! The tax payers foot the bill!
Nov 6, 2011, 12:01 pm
I don’t think they should be in a tax exempt status – unless any business that gives something back can file the same way
Nov 6, 2011, 12:16 pm
If they are tax exempt, are their books subject to public inspection?
EDITOR NOTE–Only certain information required to maintain the non-profit status is required to be made public–like the loans and compensation to top executives.