Nonprofit Hospitals Face Scrutiny Over Practices

From The New York Times:

Congressional leaders, concerned that many nonprofit hospitals are not providing enough charity care to justify their tax-exempt status, say they will set standards for the industry if it does not do so itself...

When members of Congress raise questions about executive pay, they sometimes point to the compensation paid by teaching hospitals in New York. Tax-exempt organizations generally have to file annual returns with the Internal Revenue Service.

These forms, which are open to public inspection, show that the president of NewYork-Presbyterian Hospital, Dr. Herbert Pardes, received more than $4.3 million in compensation in 2004, plus $1.2 million in contributions to his employee benefit plan. About half of his pay was a reward for performance in prior years, the hospital said.

Dr. Spencer Foreman, president of Montefiore Medical Center in the Bronx, received $1.1 million in compensation and $712,000 in benefits.

In an interview, Dr. Foreman said, "Congressional interest in this area is quite appropriate, and we as an industry have to come forward with a comprehensive response." But in defining the proper level of charity care, he said, it is "totally unrealistic" to apply the same mathematical formula to nonprofit hospitals in destitute urban neighborhoods and affluent suburbs.

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