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Tuesday, June 2, 2020  Spokane, Washington  Est. May 19, 1883
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News >  Idaho

Hospital Decries Decision To End Nonprofit Status

By Associated Press

St. Luke’s Regional Medical Center says it’s “shocked and dismayed” by Ada County’s decision to revoke its tax-exempt status.

Hospital officials on Tuesday held a news conference to criticize the county’s decision to revoke its status as a nonprofit charitable organization because it is too profitable. A spokesman said the board of directors would decide soon what to do about it.

If it stands up, the decision would make all of St. Luke’s facilities subject to property tax.

Bill Bodnar, vice president of corporate communications, said the hospital provides millions of dollars of community services to Idaho and because of that, “we firmly believe we more than earn our property tax-exempt status as a nonprofit organization.”

Gov. Phil Batt said, “I really think they probably had some basis for examining their profit status.”

The governor has been critical of the profits reported by both St. Luke’s and St. Alphonsus Regional Medical Center across town, particularly when St. Luke raised its rates 6 percent in a year when it has huge profits.

St. Luke’s Hospital is Idaho’s seventh-largest private employer with more than 2,000 workers. Bodnar said for the fiscal year ended Sept. 30, 1996, the hospital had gross revenue of $223 million.

Ada County estimated the hospital’s net profit at $20 million, which Bodnar said was too high. County officials said they voted to revoke the facility’s tax-exempt status in part because it provided only a couple of million dollars in charity benefits.

Bodnar said the hospital’s gross profit was $15.5 million and it provided $10.4 million in direct public interest benefits and had bad debts of another $5.2 million in bills it can’t collect.

“St. Luke’s … returns 100 percent of its net income year after year into the services and facilities that our growing community and the entire state of Idaho need,” he said. “We have no stockholders receiving dividends or employees receiving bonuses.

“The only beneficiaries are the patients we serve, especially those unable to pay their bills, the elderly receiving care through St. Luke’s Internal Medicine or children or babies cared for in our pediatric and neonatal intensive care units …” he said.

“We hope we will be joined by other nonprofit tax-exempt organizations throughout the county and the state of Idaho in regaining our legally deserved status,” Bodnar said.

Bodnar contended that the hospital’s profit margin, 8.9 percent based on net revenue, was lower than most for-profit hospitals.

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