Crain's Chicago Business ran this story today on the fight Provena Health is facing over what the state terms "seriously insufficient" charity care and the resultant revocation of Provena's tax-exempt status. Provena's CEO, Bill Foley, says, “We’re fighting for non-profit health care throughout the state and the country." He pointedly disagrees with the Illinois Department of Revenue's "seriously insufficient" comment, responding that the decision is “very insulting . . . to everybody associated with our organization.”
While Provena claims that it provides millions of dollars in charitable care annually, the state counters that Provena Covenant (the Provena Health hospital in question) spent only $832,000 (0.7% of its revenue of $113 million) on “charitable care” in 2002. The debate revolves around how to define "community benefit" and what tax breaks that benefit ultimately entitles hospitals to enjoy.
Our interest in this story stems from an April article in the Cleveland Plain Dealer exploring the same issue as it pertains to Cleveland Clinic and University Hospitals Health System. Here in Northeast Ohio the debate is heated, considering the state of school funding and the dollars that these institutions would be contributing in that direction:
"Between the Clinic and UH, they're spending
over $1 billion in construction," [Cuyahoga County Treasurer James] Rokakis said.
"When you ask them to contribute an insignificant
amount of money" to help the schools, they balk.
The hospitals counter that:
they provide a vital community
service and that their vast army of employees pays millions
of dollars in income taxes. Losing their tax exemptions
would damage their viability and endanger one of Northeast
Ohio's most successful economic engines, they argue.
The Clinic, for example, has $3.3 billion in annual revenue
and employs more than 34,000 people in Northeast Ohio.
Frankly, we find it hard to argue with that logic. Northeast Ohio needs the Clinic more than the Clinic needs Northeast Ohio at this point. With healthcare becoming such an economic driver in this country (and this region) it seems misplaced to worry about $20-30 million in taxes that hospitals aren't paying when big corporations and sports teams are getting massive tax breaks and delivering little in the way of jobs, etc. . . . Add to the 34,000 Clinic employees the number of folks here making a living by doing business with the Clinic and you've certainly got more healthcare jobs here than the Cavs have created! And "over $1 billion dollars in construction" sounds like an investment most regions would love to see coming from just two local businesses - hardly a point to start your complaint with.
So we'll give the final word to CCF:
"We have spent hundreds of millions of dollars over
the years adding facilities to this campus," said
Michael O'Boyle, the Clinic's chief operating
officer. "We have added thousands and thousands of jobs
both here and throughout the region. No one entity, not the
Cleveland Clinic or anybody else, can solve every
problem."