Michigan Hospital Association Puts Spotlight on Not-For-Profit Hospitals Free Care

With tax exempt hospitals garnering more attention on Capitol Hill and from the Internal Revenue Service, the industry is putting a spot light on its charitable contributions.

The Michigan Hospital Association is the latest industry representative to highlight not-for-profit members’ free medical care. According to its 2008 Community Benefit Report, the state’s 146 not-for-profit hospitals provided more than $2.1 billion in unreimbursed medical care to Michigan residents. This includes more than $209 million in charity care in 2007, up from $110 million a year earlier. Those members absorbed another $605.8 million in bad debt expense, up from $439.3 million provided in 2006, and more than $1.2 billion in unreimbursed cost of health care services compared with $738 million in 2006.

The MHA added that not-for-profit hospital members also gave free or discounted prescriptions and medical supplies to more than 140,000 individuals last year. And the hospitals in-home services, respite care, and food donations served nearly 179,000 people. 

“When Michigan residents are injured or sick, they turn to nonprofit community hospitals — day and night, day in and day out — for quality medical care,” Spencer Johnson, MHA’s president said in a press release. “This report demonstrates how nonprofit hospitals go above and beyond their mission to deliver essential health care services. Nonprofit hospitals are working tirelessly to keep residents healthier and to meet community needs.”

Not-for-profit hospitals are under pressure to increase their charitable giving to justify the hefty tax breaks they receive. Michigan hospitals had little choice in recent years given the tough and uncertain economic pressures facing the state. Michigan has the highest unemployment rate in the nation and hospitals’ bad debt expense could significantly jump now that hundreds of thousands of current and former auto workers have lost their jobs, health coverage or saw their share of health care cost dramatically increase as automakers moved to help the United Auto Workers take over health coverage for the employees and retired workers.