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Community Benefits Rise Again

by Carmela Coyle | 02/10/2017

Excuse the bad headline pun – community benefits are indeed on the rise, literally, as hospitals invested a record $1.6 billion last year, and figuratively, as the tax exempt issue is once again on the rise in Annapolis.

At a hearing yesterday before the House Health & Government Operations Committee, I was joined by Dr. Sam Ross, President & CEO of Bon Secours Health System, Martha Nathanson, Vice President of Government Relations and Community Development for LifeBridge Health, and TJ Sullivan of Drinker Biddle, a federal tax law expert. We defended hospitals’ tax exempt status against SEIU, which wants to chip away at it by suggesting that the value of tax exemption exceeds the value of community benefits.

This is a comparison that is not only faulty on its face, but supports a direct assault on hospitals’ tax-exempt status. Already a bill has been introduced that would mandate that hospitals report the value of their tax exemptions alongside the value of their community benefits.

But, as you know, community benefits are just a part of the overall charitable purpose of not-for-profit hospitals. And a major reason for the hearing yesterday was so we could clear up some common confusion about tax exemption. In other states, like New Jersey and Illinois, politicians’ lack of understanding of tax exemption, community benefits, and not-for-profit status has been a factor that led to new tax assessments for some hospitals.

At the hearing yesterday, we reminded legislators that not-for-profit status (how organizations are incorporated in state law) is different from tax-exempt status (an IRS designation given to organizations that operate for a charitable purpose). Community benefits, of course, are simply a method to publicly report some of the activities in which hospitals engage that demonstrate their larger charitable purpose.

Despite the imperfect comparison, one of the positive messages that legislators heard yesterday came from the author of a study who, contrary to SEIU’s premise, confirmed what you already know: the value of the community benefits Maryland’s hospitals provide far exceeds – by two-and-a-half times – the value of their tax exemption.

You know what this tax exemption means to your hospital and your community: it means, in almost every case, survival. Imagine the financial situation your organization would find itself in if suddenly the tax man came knocking at the door! Imagine the services and jobs that you would have to cut. Imagine, for the people across Maryland, how much hospital rates would soar in an attempt to keep hospital care alive.

The impact of taxing hospitals as if they were for-profit entities would be so damaging that it’s hard to fathom why the issue is even up for discussion. But that’s why it is so important that MHA spend significant time and energy to proactively counter efforts that question the value you provide to your communities: so that we don’t even venture onto the slippery slope that this debate could lead to.

Hospitals do wonderful things every day, inside and outside their walls. Tax exemption allows much of that to happen. We will continue to engage legislators, to help them understand that it is their constituents and their communities that reap the benefits. 

Messages From MHA President and CEO Carmela Coyle

  • Farewell

    September 29, 2017 By: Carmela Coyle
    “How lucky I am to have something that makes saying goodbye so hard.”--Winnie the Pooh​ Who could imagine that Winnie the Pooh would so aptly sum up my feelings about leaving MHA? But he does. It is hard to say goodbye because you have made it that way. To a person, Maryland’s hospital leaders have enriched the past nine years of my life with your dedication to MHA, your compassion for your patients and staff, your determination to maintain Maryland’s unique status as a national leader and, through it all, your friendship.​
    Full story
  • Bolstering the Ranks

    September 22, 2017 By: Carmela Coyle
    As MHA gears up for the 2018 legislative session in Annapolis, amid uncertainty regarding federal health care policy and final negotiations on the next phase of the All-Payer model, your association has several new faces coming on board. They will make sure not only that the voice of hospitals is heard, but that legislators and policymakers understand the critical role hospitals play their communities and throughout Maryland.
    Full story
  • Hospitals as Safe Harbors

    September 15, 2017 By: Carmela Coyle
    Violence is a growing problem in our country, and Maryland is not immune to the threat. Baltimore now has the nation’s highest homicide rate, more than 51 for every 100,000 people. Statewide, there are more than 446 violent crimes for every 100,000 Marylanders. And more and more, hospital staff on the front lines of care are feeling the pain, sometimes literally, sometimes emotionally.​
    Full story
  • National Issues, Local Voices

    September 08, 2017 By: Carmela Coyle
    Next week in Washington, D.C., the American Hospital Association will host its annual National Regional Policy Board meeting, bringing together hospital and health care leaders from across the country to discuss some of the most pressing issues our field will face in the coming years. You may remember that for governance purposes the AHA breaks the nation up into nine regions (we’re in Region 3), each of which meets three times a year to foster communication between the AHA and its members and state hospital associations. The RPBs provide input on public policy issues considered by the AHA board and identify needs unique to each region.
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  • All in a Life's Work

    September 01, 2017 By: Carmela Coyle
    This holiday weekend, as families try to squeeze in a few last beach days or host backyard barbecues before fall arrives, thousands of Maryland’s health care professionals will be at their hospital posts throughout the state.
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  • Opioid Crisis Demands Action

    August 25, 2017 By: Carmela Coyle
    The Maryland Department of Health has reported that drug- and alcohol-related deaths continued to climb in 2017 – the 550 deaths in the first quarter of 2017 represent a 44 percent increase from the same period last year. The need for effective measures to mitigate the crisis is becoming even more pressing.
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