Tax-Exempt Status Allows Hospitals to Help Communities
PUBLISHED: March 6, 2015, PITTSBURGH POST-GAZETTE
Post-Gazette columnist Brian O’Neill noted that there is a constitutional amendment in the works in Pennsylvania that would allow the Legislature to determine the tax-exempt status of hospitals (“Tough Scrutiny Ought to Be the Cost of Tax-Exempt Status,” Feb. 22).
Senate Bill 4 would give power to the Legislature to determine the tax-exempt status of all entities, including hospitals.
Currently, the decision as to whether an entity is given tax-exempt status is made by each municipality or by the courts. If the bill passes through both the House and Senate, it will be placed on the November ballot as a voter referendum.
Mr. O’Neill stated that the amendment, if passed, would allow “big hospitals” to “skirt” the tax-exempt hurdle. What he doesn’t mention is that, without improving payment rates of the current Medical Assistance program, which pays pennies on the dollar, or introducing some type of Pennsylvania insurance product beyond Obamacare, which has very high deductibles, revoking the tax-exempt status of “big hospitals” would have a detrimental financial effect on many programs on which people have come to depend.
Programs such as the Pittsburgh Promise and those supporting the homeless, domestic violence victims and at-risk children would be cut back or even eliminated. And what about small, community-based hospitals? Without tax-exempt status, many of these would simply cease to exist.
People must realize that hospitals, in return for the privilege of being tax-exempt, provide charity care for thousands of patients each year.
According to The Hospital & Healthsystem Association of Pennsylvania, hospitals in this state provide more than $5.8 billion annually in community investment and benefit, including charity care for uninsured and underinsured Pennsylvanians.
In essence, it’s a tradeoff. If hospitals were suddenly forced to pay taxes in addition to providing charity care, many would not survive long-term.
Pennsylvania hospitals must preserve their tax-exempt status in order to continue providing care at the level patients have come to expect.
If the referendum for Senate Bill 4 is on the ballot this November, I urge you to vote in favor of it.
DAVID W. SCOTT
President and CEO
Ohio Valley Hospital