Phoebe tax breaks . . . Fair Play, or Free Ride? - WALB.com, Albany News, Weather, Sports

Phoebe tax breaks . . . Fair Play, or Free Ride?

July 25, 2005

Albany--Charlie Bush stands over a table full of medical bills and letters demanding payment. The bills add up to about $300,000. Charlie owes $230,000 to Phoebe Putney Hospital.

Charlie's wife can't stand. Edna Bush lies in the next room visiting with family, weak from cervical cancer and the brutal treatments that, so far, haven't helped. Charlie says his wife has endured "non-stop treatments since May of 2004."

The Bushes have five children. One son is serving with the Army in Iraq right now. Charlie also cares for his ailing mother-in-law. He's proud of his family and his reputation. He worked hard to build both. "I pay my bills," Charlie said. "There ain't nobody's office you can walk in that will say I don't pay them on time."

But he can't pay Phoebe even though he works two jobs because he doesn't have insurance. "I'm being overcharged here, badly," Charlie said. "They wouldn't do that to an insurance company. Why they doing it to a self-employed person?"

Charlie struggles just to pay for Edna's medicine. "Her medication hits me for about $2,000 a month." He says he can't even afford the late fees on the Phoebe bills, but the hospital won't give him a break because he makes more than $37,000 a year. Now, the family gets daily calls from a collection agency and Charlie worries about his financial future. "If you corrupt my credit, I can't run a business," Charlie said.

The man in charge at Phoebe says that's not the way they run their business, and their financial advisors do help people who have trouble paying their bills. Phoebe C.E.O. Joel Wernick said, "we have a well-trained group of people who can pretty much work through almost any circumstance."

Most insurance companies and health management organizations get discounts, sometimes huge reductions, at most hospitals, but Wernick insists Phoebe doesn't overcharge uninsured patients. "Well we basically charge everybody the same," he said.

To maintain its not-for-profit status, Phoebe must provide some free or low-cost health care for patients who can't afford it. Phoebe officials claim they give more charity care than most hospitals. "Dependant upon a person's financial status we will actually decrease the actual charges," Wernick said.

Still, Phoebe clears tens of millions of dollars in profit every year. Wernick said, "I don't think this community wants to have its community hospital losing money."

You don't have to look far in southwest Georgia to see something owned by Phoebe. It's an expanding health care empire that owns close to 100 pieces of property just in Dougherty County. So what is its county property tax burden? Less than ten-thousand dollars this year. Stan Jenkins doesn't think that's right. He said, "there is a fundamental unfairness going on here that cannot be ignored."

Jenkins lives in Champaign County, Illinois. So why should we care what he thinks? Because he's chairman of the tax board that essentially yanked the local property tax exemption of that county's two not-for profit hospitals. "We recommended that the Illinois Department of Revenue deny that exempt status," Jenkins said.

The state agreed. Champaign County felt the hospitals didn't give enough charity care and were too aggressive trying to collect bills from people who couldn't pay. Jenkins said, "We just did not think this was befitting a charitable organization."

And another beef, the same one Charlie Bush has with Phoebe, Jenkins says hospitals charge the most for the people who can least afford to pay. "It is typical in this country, nationwide, that people who are without insurance are going to be billed two to five times more than someone with insurance for exactly the same care, the same service, the same bandaid, the same aspirin," Jenkins said.

The rules are different in Georgia.  Local tax authorities have a little less power. As long as the I.R.S. classifies Phoebe Putney as not-for-profit, most of its property will be exempt from local taxes. Add sales and corporate income tax breaks, and one accounting firm estimates Phoebe saves well more than 20-million dollars a year.

Joel Wernick says local taxpayers are actually getting a break. "I think the taxpayers ought to be smiling." Smiling because Phoebe no longer accepts county money to provide indigent care. "The taxpayers actually got what is about a $2.2 million annual break," Wernick said. And that's not all the taxpayers get.

Dr. Mary Sue Martin walks into an examination room at Phoebe Northwest and cheerily greets a patient with a friendly, "hi Mrs. Bodiford." Martin is a third year resident in Phoebe's Family Practice Residency Program that brings new doctors to underserved areas. "It benefits especially southwest Georgia because a lot of people that come through the residency program stay in southwest Georgia," Dr. Martin said.

She chose the Phoebe program because she says it's the best community-based residency program in the south. Mrs. Bodiford says takes great care of her.  "I am [glad to have her around]," Bodiford said.

The residency program is just one of more than two dozen community outreach programs supported by Phoebe. Community Health Institute Director Sandra Handwerk said, "If we can keep people healthy so that they don't need to come to the emergency room, it reduces health care costs for everyone of us."

Phoebe helps build wheelchair ramps at the homes of disabled people. The hospital provides nurses for Dougherty County Middle and High Schools. The Men's Health Program, obviously, aims to keep men healthy. Phoebe provides free child car seats for new parents. And the Gateway to Care Program makes sure thousands of people get the often expensive medicine they need. "Helping people have consistent access to their medication reduces emergency room visits, reduces hospitalizations, and also improves the quality of life for people,"Handwerk said.

Phoebe executives say in addition to those community programs and the charity care, the hospital provides southwest Georgians with something we all want. "They're getting the very best health care with the best technology from anywhere in the world. It's there for those who can pay and those who can't pay and they're treated the same," Wernick said.

Charlie Bush isn't so sure that's true. He isn't sure why Phoebe doesn't spend more of its millions on people like him. "If you're there to help me, you're supposed to figure out a way to help me." Help him climb over a mountain of debt as his wife stands up to the biggest challenge this family may ever face.

Ultimately, the federal government may decide whether hospitals like Phoebe do enough to earn their substantial tax breaks.  A U.S. Senate committee is investigating the finances of ten not-for-profit hospitals, including Phoebe, with an eye toward drafting legislation that may spell out new rules for those hospitals to follow.

    • You can see the tax returns for Phoebe Health Systems, the Phoebe Foundation, and Phoebe Putney Memorial Hospital by clicking this link. You will have to register to access the .pdf files, but there is no cost.

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