ECDC Co-Sponsors Resolution on Non-Profit Hospital Regulations

ECDC member Rochelle Pardue-Okimoto is sponsoring a resolution to require clarification of the charitable activity of non-profit hospitals. At its Oct 22 meeting, the ECDC Board agreed to co-sponsor the resolution at the CDP meeting on Nov 19.

Rochelle described her motivation for authoring the resolution. “The issue started to come up back in 2011 when [the California Nurses Association] started our negotiations with Sutter Health. Questions at that time were being asked by the nurses such as: how can a not-for-profit organization make three quarters of a billion dollars in profit in one year and get away with it? We were also perplexed as to why Sutter could give one million dollars to the Sacramento Kings and call it “donating to charity.” Meanwhile they were shutting down units that were not considered profitable and while out on the picket line we began to find out they were turning away patients in the ER that could not afford to pay. Sending them to the Alameda County Hospital.”

Rochelle supported AB 975, a bill from Assemblymen Weikowski and Bonta that would have required additional reporting on charitable activities from non-profit hospitals. While that bill died on the floor, Rochelle hopes that it will be re-introduced in the next session.

The text of the resolution follows:

California’s Nonprofit Hospitals and Charity Care

WHEREAS, nonprofit hospital’s in California frequently conduct business similar to for profit hospitals and, the profit (or excess revenue) of California’s nonprofit hospitals has soared into the billions of dollars while their top administrators’ salaries have climbed into the millions, while they continue to maintain a tax-exempt status; and

WHEREAS, according to the State of California Auditor, in the 2012 audit, the amount of charity care they provide has dropped to a percentage of service that is the same as or less than that of for-profit hospitals, while economically struggling counties and cities in California lose more than $1 billion as a result of the tax exemption of nonprofit hospitals, in addition to the direct payments counties make to hospitals in their geographic area to provide hospital care for the poor, thus effectively subsidizing the hospitals profits with taxpayer dollars; and

WHEREAS, the California State Legislature and Board of Equalization have already began to investigate nonprofit hospitals as well as questioning what nonprofit hospitals consider charity care and community benefits since there is currently no clear definition of what constitutes charity care or community benefits nor are there any clear enforceable penalties for non-compliance.

THEREFORE BE IT RESOLVED, the California Democratic Party calls on Governor Jerry Brown and the California State Legislature to enact legislation to clearly define charity care and community benefits. 

THEREFORE BE IT FURTHER RESOLVED, that this legislation holds nonprofit hospitals accountable by protecting both the rights of all patients and the rights of the tax payers of California.

Authored by Rochelle Pardue-Okimoto, AD 15; Sponsor: Hilary Crosby, California Democratic Party Controller