Council seeks more details on Alta Bates’ charity care

Alta Bates Herrick Campus on Dwight Way in Berkeley. Photo: Google
Alta Bates Herrick Campus on Dwight Way in Berkeley. Photo: Google

By Julia Hannafin

For 20 years, Alta Bates has provided more than 7,000 square feet of space on its Herrick campus for LifeLong Berkeley Primary Care to help it provide high-quality health and social services to under-served people of all ages. Additionally, Alta Bates has contributed money to help LifeLong Medical Care rebuild its West Berkeley campus and funded a portion of Project Respect, a program designed to reduce the number of emergency room visits.

These efforts are all part of Alta Bates’ community benefits — a service Alta Bates must (and is proud to) do as a not-for-profit hospital. But some say Alta Bates is not doing enough, particularly in the area of “charity care,” or providing services to those who cannot pay for health care.

The California Nurses Association, which is locked in a labor dispute with the hospital, is questioning Alta Bates Summit Medical Center’s generosity. As a result of the issues the CNA raised, the Berkeley City Council on July 16 adopted a resolution  requiring Alta Bates Summit Medical Center (ABSMC), a subsidiary of Sutter Health, to file an annual report that includes new information about its charity care. The council will also hold a work session in the fall to learn more about ABSMC’s tax exempt status.


“In 2010, Alta Bates provided $4.8 million in charity care,” said Dan Johnston, a researcher with the Institute for Health and Socio-Economic Policy, the research arm of the California Nurses Association, at a city council meeting on July 16th.

“That seems like a lot of money — and it is,” he continued. “But juxtapose this against the $110 million they made in profit during the same year. Juxtapose that against the $53 million they get in tax exemptions from their nonprofit status.”

A Sutter Health representative, Deborah Pitts, manager of community improvement and community benefit for the company’s East Bay region, also spoke at the meeting. She was brief, saying she chose to forgo the longer presentation Sutter Health had prepared, and only used around 30 seconds of her allotted time to speak.

“Alta Bates Summit is proud of the community benefit that we provide the residents of Berkeley,” said Pitts. “We believe this is a worthwhile discussion to have with the council, but we will only have this discussion if it is not driven by the nurse’s union. Because that’s very clear what the agenda is this evening.”

“Secondly, we want to assure you that we follow the state and federal government (guidelines), which are the entities that govern not-for-profit hospitals,” said Pitts.

Pitts then left the council chambers quickly. Her abrupt departure evoked strong responses.

“It’s shocking and depressing to have the representative of Alta Bates say we’re not going to play ball and … stomp out of the room,” said Councilman Darryl Moore. “It shows this community that they’re not willing to be responsible and transparent.”

Because of ABSMC’s not-for-profit status, state and federal laws require it to put surplus revenues toward benefitting the community in which the hospital is located. In exchange for this service, the medical center is exempt from paying property taxes, income tax on profits,  and almost all state and local sales taxes. ABSMC provided $120 million in community benefits in 2012, according to a long report readied by ABSMC but not presented by Pitts to the council.

But representatives from the CNA said the term “community benefits” is a catch-all phrase that does not provide transparency. Some of the donations go to benefit the hospital, not the poor people in the community who need it the most.

“Charity benefits” can be stretched to mean just about anything Sutter Health wants it to mean, said Pilar Schiavo, a registered nurse. ABSMC’s “community benefits” included contributions to their own for-profit cancer center, she said. “That is a community benefit — when they give themselves money.”

Sutter Health’s longer statement — that Pitts declined to communicate at the meeting — said there are, in fact, very clear definitions of what can and cannot be counted as community benefits, including community benefit programs developed in response to specific community need. Charity care is only one piece of community benefits.

In addition to working with Lifelong Medical Care, ABSMC has worked with the Berkeley Health Department to develop a respite care program for homeless and has contributed $300,000 to La Clinica de la Raza.

Moore and other Berkeley City Council members said they wanted to know more specifics about what ABSMC was doing for Berkeley’s most needy. The hospital has been providing a report about its community benefits for years, but the council voted to require it to break down the numbers more and provide more detail about its charity care contributions.

But the provision of additional charity care may be beyond Berkeley’s jurisdiction. “Charity care” lacks a uniform definition at both the federal and state level; in addition, there are no federal or state regulations that set out any requirement for the amount of charity care that must be provided. If Berkeley is seeking to make its not-for-profit hospitals more generous in the amount of charity care they provide, it might be a battle set up to be taken at the state or federal level.

In addition, as Pitts noted in Alta Bates’ statement, it is important to remember the Patient Protection and Affordable Care Act includes provisions that will expand community benefit opportunities with the assumption that the law will decrease the need for charity care in the future.

Said Councilman Moore, “People are saying we’ll just wait for Obamacare; we’re always just waiting. I’m saying we need this report today, now. We don’t need to wait for a year from now.”

Julia Hannafin is a summer intern at Berkeleyside and a student at Columbia University studying creative writing and American studies. She writes for the music blog The Metropolitan Jolt.

Related:
UC, Sutter nurses on strike over contracts, patient care (05.22.13)
Nurses strike at Alta Bates, 10 other hospitals (06.13.12)
Nurses’ strike draws cheers and honking horns (09.22.11)

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