Cleveland Clinic dinged for charity care levels
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Lazaro Gamio/Axios
Cleveland Clinic is once again in the spotlight for its limited investments in the community.
Driving the news: The Clinic is one of 12 major nonprofit hospitals that dedicated less than 2% of their total revenue to charity care in 2021, the U.S. Senate Committee on Health, Education, Labor and Pensions recently found.
- It's a key criterion for maintaining tax-exempt status that committee chair Sen. Bernie Sanders (I-Vt.) wants tightened.
The big picture: Nonprofit hospitals are tax-exempt because they provide community benefits and financial assistance to patients. But lawmakers and other industry watchers have become increasingly concerned about their priorities, Axios' Maya Goldman reports.
By the numbers: Of 16 hospital systems the committee reviewed, three spent more than 5% of their revenue on free or discounted medical care for patients who cannot pay.
- Yes, but: Cleveland Clinic spent only 1.5% of its revenue on charity care, while paying CEO Tomislav Mihaljevic $6.6 million.
The other side: The American Hospital Association countered with its own findings that tax-exempt hospitals offered $129 billion in total benefits to their communities in 2020, amounting to an average of about 15.5% of their total expenses.
- It called the Senate report "totally off base," saying it excluded other community services nonprofit hospitals provided, like patient financial aid and health education programs.
Catch up quick: Among all hospitals in the nation, the Clinic has the fourth-highest "fair share deficit" — the difference between the estimated amount it receives in tax breaks and the amount it invests directly into its community.
The intrigue: As of 2018, the Clinic owned about $2.4 billion in property, all of which is tax-exempt.
What we're watching: On the campaign trail last year, Cuyahoga County Executive Chris Ronayne proposed a "health equity fund," supported by payments in lieu of taxes from both the Clinic and University Hospitals.
- If the hospitals paid 35% of their property tax savings, Ronayne said, it would generate up to $39 million per year for community health programs.
- The hospitals weren't receptive at the time, and a county spokesperson tells Axios that "plans are still ongoing."