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Senators consider curtailing hospitals' tax breaks

Wall Street Journal, July 10, 2009

Senators working on healthcare legislation are considering provisions to pare back the billions of dollars in tax breaks for U.S. hospitals. More than half of the 5,482 hospitals in the U.S. are nonprofits that don't pay federal, state or local taxes, according to the American Hospital Directory. The tax exemptions were meant to help hospitals shoulder the costs of providing such free care. But in the past decade, some nonprofit hospitals have amassed big cash surpluses, even as they engaged in aggressive bill-collection tactics. Some provide less in charity care than the value of their tax breaks. Helping drive the debate is the idea that any federal healthcare overhaul that provides for the uninsured would reduce the need for charity care.