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8 N A T I O N A L N U R S E W W W . N A T I O N A L N U R S E S U N I T E D . O R G M AY | J U N E 2 0 1 8 CALIFORNIA D espite increased scrutiny in recent years, culminating in a deci- sion this spring by California Attorney General Xavier Becerra to reject appeals by three California hospitals to be exempted from charity care obligations, a new report released in June by the Califor- nia Nurses Association shows a sweeping drop this decade in what California nonprof- its overall are providing in charity care. The percentage of charity care provided by California nonprofit hospitals, as a percentage of their operating expenses, fell by one-third from 2011 through 2016, the most recent year for which public data is available. California nonprofit hospitals reduced spending on charity care even while recording a total of $37 billion in net income (profits) during that same period. The findings were based on information reported by the hospitals them- selves to the Office of Statewide Health Plan- ning and Development agency and other publicly available information. Since the expansion of Medicaid (known as Medi-Cal in California) as a result of the Afford- able Care Act (ACA), California nonprofit hospitals are providing even less charity care, a fall of 42 percent in the years 2013 through 2016. Some hospitals have asserted they no longer need to provide the same level of charity care as a result of the ACA, even though more than 12 million Californians, according to another CNA-sponsored study, struggle to pay inflated medical bills. Nonprofit hospitals reap enormous financial benefits from taxpayers in the form of exemption from property, income, and sales taxes, as well as profiting from non- taxed charitable contributions and tax- exempt bond status. In exchange for these tax exemptions, they are supposed to provide "community benefits" to the public, such as free or low-cost medical care (chari- ty care), but these benefits are loosely defined and the amounts are not specified. "Attorney General Becerra's recent actions, and the new data, are a reminder that the concerns over California's lax requirements on charity care, as well as community benefit programs, remain an important public policy issue that should be addressed by lawmakers," said CNA Copresident Deborah Burger, RN. Both figures are a comparison to the amount of charity care nonprofits provided prior to 2011 and update numbers from a 2012 CNA research study that documented how California private, not-for-profit hospitals reaped more than $1.8 billion in government subsidies and benefits from their tax-exempt status beyond what they provided in charity care in 2010. "Instead of increasing the level of charity care they provide after the glare of that spot- light, the hospital industry has shamefully acted with arrogance and indifference, even as millions of Californians continue to struggle with inflated, unpayable hospital bills," said Burger. What makes the numbers even more disturbing, says CNA, is the relatively small difference between nonprofits and for-prof- its in charity care, especially following implementation of the ACA. From 2013 through 2016, the nonprofits' percentage drop of 42 percent nearly mirrored the percentage drop of 48 percent for the for- profit California hospitals. Hospital industry representatives have defended the big decline in how much chari- ty care they provide by citing other activities, including STD-prevention, nutrition and health education classes, and even partici- pation in farmers markets. "None of those programs compensate for the hospital care needed by patients who can't afford the increasingly high costs of essential medical care when they are sick or injured," said Burger. "The decline in charity care, and T Total Charity Pro Total Bad Non-Profit 2011 y Care ovided $985,069,684 d Debt $696,243,209 t General Acut 2012 4 $1,084,411,910 9 $726,642,796 te Hospitals — 2013 $1,121,763,956 $8 $928,547,142 $6 — Aggregate C 2014 20 816,306,961 $675,8 602,578,519 $475,5 Charity and Bad 015 2016 898,650 $651,314,5 559,405 $459,166,9 d Debt 2011-2 588 940 016* T Net In Total Ope Exp Charity Care as Pe of Operating Exp ncome $4,377,325,76 erating penses $51,209,462,73 ercent penses 1.92% 7 $3,327,574,310 39 $50,593,790,086 2.14% entage c er P $4,405,044,930 $4, $58,415,863,421 $54 1.92% eduction In Charity C R 063,002,367 $4,649 4,868,740,226 $65,303 1.49% 1.0 33.88 16: 11-20 e 20 Car 9,367,708 $3,377,666 3,506,798 $69,538,398 04% 0.94% 8% 6,388 8,904 % *Does not include er only r . K als spit er F e K f St om Offic a fr t Data ro ce o tatewide Healt Kais Foundation Ho ta s. Kais re SHPD o O a t t s limit t epor SHPD O t ( th Planning and Developmen (OS D) rts ted financial data to OS D. entage R c er P eduction In Charity C R 1.94 4 16: 13-20 e 20 Car 4% Nonprofit hospitals fail even more to provide charity care Numbers have dropped precipitously since last review A sampling of systems with big drops in charity care since 2013 Cedars-Sinai Medical Center 83.4 Sutter Health 61 Memorial Health Services 53.6 Dignity Health 48.8 Scripps Health 47.1 Kaiser Permanente 37.9 Providence and St. Joseph Health System 37.9 Numbers are expressed in percentages NEWS BRIEFS