Another volley was fired in the battle between investor-owned and not-for-profit hospitals when Columbia/HCA Healthcare Corp. conducted a study of community benefits in Orlando, Fla.
Results of the study, obtained by MODERN HEALTHCARE last week, indicated that "only one of six (not-for-profit) hospitals provided a positive net benefit to the community" in 1993.
The report was conducted by St. Petersburg, Fla.-based Healthcare Management Decisions for Columbia's Central Florida division. It characterized five of six not-for-profit hospitals in the area as providing "negative community benefits."
Healthcare Management Decisions authored a similar report in 1993 on seven not-for-profit hospitals in the Fort Myers, Fla., area (Nov. 1, 1993, p. 3). It also has conducted studies in Florida and Tennessee.
Community benefits were defined for investor-owned hospitals as the sum of charity care and taxes. For not-for-profit hospitals, charity care was subtracted from state, federal and local taxes that were avoided because of the hospitals' tax-exemptions.
When taxes are added to charity care, Orlando's five for-profit hospitals contributed "positive community benefits," the report said.
The Columbia-sponsored report is the latest round in the ongoing dispute between some investor-owned and not-for-profit hospitals over which sector contributes more to ease the government's burden of caring for the poor.
Overall, the average for-profit hospital's community "benefit" was 5.5% of net revenues, and the average not-for-profit hospital's community "burden" was 3.1% of net revenues, the report said.
The effect was that central Florida communities lost $30.4 million from the not-for-profit hospitals and gained $12.1 million from the for-profit hospitals, the report said.
Angry not-for-profit executives in Orlando blasted the latest Columbia report, calling it inaccurate, incomplete and misleading. Officials of Columbia in Orlando were unavailable for comment and referred questions to the Florida League of Hospitals, the for-profit hospital trade group based in Tallahassee.
"It (the report) very definitely is skewed," said John Bozard, vice president of development for five-hospital Orlando Regional Healthcare System. "Any responsible organization that wants to report their charity care and community benefits should follow a responsible methodology."
Bozard said ORHS has adopted the Catholic Health Association's social accountability budget to measure community benefits. The CHA's document measures such items as inpatient and outpatient charity care, research, education, grants, and the costs of providing essential community services.
Using that methodology, ORHS provided $33.5 million in community benefits, compared with the negative $9.8 million attributed to it in the Columbia report. ORHS' flagship hospital is 827-bed Orlando Regional Medical Center (See chart).
Of the six not-for-profit hospitals, Florida Hospital Medical Center "poses the greatest burden to the community with $12.6 million in negative community benefits," the report stated. The 1,331-bed hospital is sponsored by the Seventh-day Adventist Church.
The report concluded that the state of Florida and the federal government should consider modifying their tax exemptions for not-for-profit hospitals.
"(Columbia) is using a narrow definition of community benefits to try to gain a competitive or credibility advantage in the market," said Richard Morrison, Florida Hospital's vice president of strategic planning and government relations.
Morrison said Florida Hospital provided $25.7 million in community benefits when medical research and education, unpaid services and community grants are to added to charity care.
A Columbia spokeswoman in Orlando said the report was prompted by allegations made by several not-for-profit hospitals that Columbia has not provided adequate community benefits.
"It was a defensive move," said Cynthia Sucher, the Columbia spokeswoman. "There were disparaging remarks made about our benefits to the community."
Columbia attacks Orlando, Fla.-area not-for-profits' 1993 community benefits
Hospital Taxes (not paid)1 Charity Community benefits2
Central Florida Regional Hospital (IO) $4 million $744,000
Osceola Regional Medical Center (IO) 3.1 million 181,000 3.2 million
Columbia Park Medical Center (IO) 1.9 million 177,000 2.0 million
South Seminole Hospital 3 1.7 million 67,000 1.8 million
Florida Hospital Kissimmee 4 236,000 110,000 346,000
St. Cloud Hospital (NFP) (359,000) 686,000 327,000
Princeton Hospital (NFP) (1.2 million) 227,000 -945,000
Health Central (public) (1.3 million) 1.3 million -388,000
Winter Park Memorial Hospital 5 (8.3 million) 1.3 million
Florida Hospital Medical Center in Orlando (NFP) (19.2 million)
6.5 million -12.6 million
Orlando Regional Medical Center (NFP) (19.9 million) 9.9 million
1 Taxes not paid are the amount of money not-for-profit hospitals avoided through exemptions. 2 Community benefits as defined by Columbia/HCA Healthcare Corp. are the sum of the taxes paid or not paid and charity care. 3 For-profit joint venture with Healthtrust and Orlando Regional Healthcare System. 4 For-profit in 1993. Now not-for-profit affiliated with Florida Hospital Medical Center in Orlando. 5 Not-for-profit in 1993. Now for-profit under Columbia.
Source: Healthcare Management Decisions, for Columbia/HCA