Charitable Care for non profit healthcare

I have read an interesting article from the HealthCareBlog.

The idea I took away is how tax codes have changed the reporting status of not for profit hospitals. I have seen a few financial statements posted on the web one in particular Sherman Hospital.  The Affordable Care Act

There are some measurements in the amounts of charitable care these organizations provide however, some dispute that these organizations provide enough care to warrant the tax breaks they receive. I believe that this is the case as well. I have seen where these organization charge individuals without insurance higher prices and this goes towards their charity care or uncompensated care. There has been tax language that has effectively put a cap on this amount.

A few weeks ago I was looking at the financial statement of Sherman Hospital. 

• Sherman Hospital reported about 10% of their revenue going towards bad debt. Then due to the medicaid assessment program this institution received about 35% of that bad debt back. This shifts their uncompensated care to a range of about 7% I’m not sure if the allowance for bad debts would be kind of the same thing but the ratio for Google a for profit company is at 6.63%

Further the company in 2013 had used $30 million cash for investing. I wonder how much value is being done by offering tax exemption in this instance. There is also the question of the true cost of services is the cost figured at the CMS reimbursement rates which means that the profit range is higher or is the true cost reflected in the billing? I’m not sure where to find this out yet but I imagine it is on the lower side of the equation.

Medicaid assessment program http://www.ncleg.net/Sessions/2011/Bills/Senate/PDF/S32v4.pdf

Sherman Hospital Financial information http://www.advocatehealth.com/documents/financialinformation/ShermanHealth2013_FINAL.pdf