OPINION:
America’s nonprofit hospitals occupy a special place in our healthcare system.
They receive billions of dollars in tax exemptions because they are supposed to operate as charitable institutions dedicated to serving their communities.
In exchange for that privileged status, taxpayers reasonably expect meaningful charity care, responsible stewardship of resources and a commitment to serving patients rather than profits.
Across the country, however, many nonprofit hospital systems have accumulated enormous financial reserves, expanded their real estate portfolios, paid executive compensation packages that rival those of Fortune 500 corporations and generated operating margins that would be the envy of many for-profit businesses.
At the same time, they continue to charge patients prices they cannot afford, employ debt collectors to track down families who cannot pay, and fail to offer charity care to individuals who qualify for financial assistance.
That is why I am advancing Texas’ Charity Medical Care and Medical Debt Reform Model Act. I advanced similar pieces of legislation at the National Association of Christian Lawmakers earlier this year. This legislation is based on a simple principle: If an institution receives tax-exempt status as a charity, it must act like one.
Americans trust nonprofit hospitals to use their substantial tax advantages well. Those benefits represent a significant investment by taxpayers. Every dollar a hospital does not pay in property taxes, income taxes and other obligations is effectively a dollar that local communities, schools and public services forgo in support of that hospital’s charitable mission.
Hospitals are not entitled to tax exemptions, in other words. The exemptions are a sign and seal of public trust. When nonprofit hospitals operate in ways that are indistinguishable from for-profit corporations, that trust begins to erode.
This legislation does not punish hospitals. It holds them accountable. The bill requires nonprofit hospitals to proactively screen patients for eligibility for charity care before pursuing collections. It ensures that patients who qualify for financial assistance receive the benefits to which they are entitled.
It creates transparency and accountability when hospitals fail to follow their own charitable obligations. It also protects patients by preventing debt arising from lifesaving and emergency care from being reported to credit agencies.”
Broadly speaking, it shifts the burden away from vulnerable patients and toward the institutions that have accepted charitable obligations in exchange for public benefits.
The overwhelming majority of patients do not understand the complex eligibility requirements buried within hospital financial assistance policies. Many never learn that they qualify for free or discounted care. Others are sent bills and collection notices before they have a meaningful opportunity to apply.
That is not charity. It is bureaucracy standing between patients and the assistance that nonprofit hospitals are obligated to provide.
The legislation also addresses another problem: Healthcare systems increasingly operate through complex corporate structures that include physician practices, outpatient facilities, specialty clinics and other entities.
If these facilities are part of the same nonprofit system, they should be held to the same charity care standards. Patients should not lose access to charitable protections simply because they receive care from one facility rather than another within the same organization.
Obviously, hospitals play a vital role in our communities. They provide lifesaving care, employ thousands of healthcare professionals and often serve as economic anchors in the regions they support. Many nonprofit hospitals work diligently to fulfill their charitable missions.
Good actors should have nothing to fear from accountability. As a medical doctor, I have seen firsthand some of the sneaky tricks that hospitals use to pad their profit margins, and I wrote this legislation to prevent those tricks from working.
Strong oversight protects the integrity of the nonprofit sector itself. Institutions that genuinely prioritize community benefit should not be forced to compete with organizations that enjoy the same tax advantages while behaving increasingly like commercial enterprises.
At a time when healthcare costs continue to strain family budgets, we should ensure that charitable institutions live up to the commitments that justify their tax-exempt status. When nonprofit hospitals fail to meet those obligations, states should have meaningful tools to enforce compliance and protect the public interest.
If taxpayers are asked to subsidize nonprofit hospitals through generous tax exemptions, they should get genuine charity, faithful stewardship of the public trust and meaningful community benefits in return.
• Rep. Thomas John Oliverson, M.D., is an anesthesiologist and Republican member of the Texas House of Representatives for District 130.
Please read our comment policy before commenting.