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Hospitals & profits: More review is needed

March 18. 2012 8:35PM

Legislators who advocate that the state address the expansion of non-profit hospitals, which have been known to reduce local property tax rolls by gobbling up for-profit physicians' offices and converting them to non-profit status, have a good cause even if they did not have the right remedy last week.

The House on Thursday killed House Bill 1482, which would have declared as for-profit any satellite offices owned by non-profit hospitals. It is a sensitive issue in some towns and cities, particularly Manchester, where Elliot Hospital's new facility on Queen City Avenue is mostly tax-exempt. The argument in favor of the bill was that these satellite offices are essentially for-profit, so they should not escape taxation even if they are owned by a non-profit hospital.

There is some logic to that, but the bill was too broad. It might not be the case that every satellite office is primarily for-profit. Nor is it necessarily true that the bulk of a non-profit hospital's operations at its main campus are charitable. The issue is more complex than HB 1482 recognized, and the House was right to kill the bill even though it addressed a serious problem for local governments.

As both Republicans and Democrats have recognized, a lot of non-profit hospitals in New Hampshire appear to be operating in an aggressively profit-driven manner. They pay huge salaries to their top executives, fight hard over territory and customers, and try to harm their competitors. Their charitable work seems to get lost in the drive to generate bigger profits.

That is an issue that won't be adequately addressed by a simple bill like HB 1482. It needs more careful study. Legislative leaders ought to appoint a study committee to review the law and the practices of non-profit hospitals to see what, if anything, needs to be done to ensure that they are not abusing their non-profit status.

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