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Is charity care shrinking in nonprofit hospitals?

By Andrea Perkins

OWNED BY CATHOLIC HEALTHCARE WEST, a leading nonprofit health care corporation with 48 hospitals in the U.S. (including San Francisco's St. Francis and St. Mary's), Dominican Hospital is the largest in Santa Cruz County. As a health care provider with a religious mission--Dominican does not perform abortions, for example--CHW has dual responsibilities when it comes to health care for the underprivileged.

But a study by the Service Employees International Union Local 250 in San Francisco claims that charity care at San Francisco's three largest hospitals, two of which are owned by CHW, has slipped dramatically--by 16 percent in the past four years. The report claims that 0.5 percent of the overall operating budgets of these hospitals went toward charity, but even that 0.5 percent, the report says, includes money spent on such "community benefits" as taking blood pressure in shopping malls and drug research.

Is Dominican's record any better? Dominican's 1999 Unsponsored Community Benefit Expenses Report suggests not. The report does show that $6.17 million of Dominican's operating budget goes toward various "community benefits." While that is 5 percent, not 0.5 percent, like its sister hospitals, Dominican defines "charity" loosely. That 5 percent includes some services to the poor, but it also includes things like training programs, donations to other organizations, education (health-oriented classes offered at Dominican), newsletters (the glossy "Focus On Health" and the biweekly "Daily Bulletin") and outreach efforts such as the tattoo removal project (designed "to enable individuals to distance themselves from gang influences and to enable them to secure employment"). The amount spent on actual "charity care," or health services provided to people who cannot pay for them, equaled $1.85 million, less than a third of the 5 percent set aside for "community benefits." Even when you throw in the unpaid costs of public programs like MediCal and MediCruz and donations (food and clothing, infant care seats, etc.) into the mix, Dominican's total "benefits for the poor" fall below $4.5 million.

Dominican's total community benefits have increased since 1996, the earliest year for which data is available. Yet direct benefits to the poor (including MediCal and MediCruz subsidies, outreach and donations) have shrunk by $584,000, while benefits for those whom Dominican's report refers to as "the broader community" have more than doubled. The amount Dominican spends strictly on charity care has dropped $200,000 since 1996. At the same time, Dominican's "cash and in-kind donations" to other organizations (things like meeting space for community groups, free notary services, first aid at community events, computers for schools and parking for clergy) swelled from $181,752 to $397,093--just about the same amount dropped from charity care. During the past four years, these kinds of benefits to the broader community have increased by over half a million dollars, going from $654,000 in 1996 to $1.7 million in 1999.

"Hospitals in California provided $2.5 billion in uncompensated care last year," says Jan Emerson, director of media relations for the California Health Care Association, a nonprofit organization affiliated with the American Health Care Association, which represents long-term care providers like hospitals and nursing homes. "That is a 28 percent increase from the year before."

Maybe so, but so-called nonprofit hospitals seem to be lagging behind county hospitals and even some for-profit institutions when it comes to dealing with the poor. According to Barry Snyder, CEO for Watsonville Community Hospital, the county's other hospital choice, "Three to 5 percent of our patients fall into the charity care category."

What should the residents of Santa Cruz County expect from a hospital whose mission statement reads, "to improve the health of the community and address unmet health needs, particularly those of the poor, disadvantaged and underserved"? Metro Santa Cruz wanted to ask that question of Dominican Chief Executive Carol Adams. Spokesperson Penny Jacobi promised an interview with Adams for this article, then later withdrew the offer without explanation.

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From the September 20-27, 2000 issue of Metro Santa Cruz.

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