Lee Health provided $179M in benefits in 2023 in exchange for tax breaks

Liz Freeman, Naples Daily News
·4 min read
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Lee Health committed $179 million last year through charity care, health fair offerings and education to help the community.

That’s according to the most recent “community benefits” report the publicly run health system sent to the IRS to justify its tax exempt status.

That’s an increase from $165 million in 2022 and $160 million in 2021, according to Lee Health, the dominant hospital system in Lee with four acute-care hospitals, a children’s hospital and a long list of outpatient services.

Lee Health is one of the largest public hospital systems in the U.S. and in Florida with a $3 billion operating budget yet it is does not receive direct taxpayer support through a tax levy. That’s despite being a “safety net” hospital which cares for all patients regardless of ability to pay.

More: Lee Health should become private nonprofit hospital, consultants say

More: Lee Health's possibility of going private hasn't captured public's attention yet. Will it?

Community benefits' reports under fire

The annual community benefits’ reports, required of all tax-exempt nonprofit hospitals, have come under fire from members of Congress for lack of oversight by the IRS.

In addition, the Lown Institute, a health care think tank that examines hospital social responsibility, conducted research on what nonprofit hospitals give back as community benefits against their tax breaks.

Out of 1,700 nonprofit hospitals, Lown found in 2020 that 77% spent less on charity care and community investment than the value of their tax breaks.

The American Hospital Association responded that Lown cherry picks its data to “fit its preconceived notions about hospitals.”

Tina Fleming, a child advocate at Golisano Children's Hospital unloads life jackets to be placed in a life jacket station built by Gateway High School students in January. The stand was built by the students in partnership with Lee Health and others. Fleming secured grants to get six stands built. The stations offer life jackets to those who need them while visiting area beaches.

More: For profit HCA Florida beefing up competition to publicly run Lee Health

The AHA says that for every dollar in tax exemption, nonprofit hospitals provide $9 in benefits. A 2022 analysis found that tax-exempt hospitals provided more than $110 billion in total benefits to their communities in fiscal year 2019, according to the AHA.

A U.S. Government Accountability Office report said the IRS lacks a well defined process for reviewing the reports even though the agency is required to do so of each hospital every three years.

NCH in Collier County, a private nonprofit system with two hospitals and a combined 713 beds, will have its community benefits report for last year completed soon, according to spokesman Shawn McConnell.

Why should you care about community benefits?

The uptick in what Lee Health gives back comes at a time when the system is exploring converting from being a public system to be a private nonprofit system to gain leverage against for-profit hospitals competitors and private equity firms that invest in health care services.

Lee Health’s elected board of directors will decide by October if it will convert or not.

Even if Lee Health does convert to nonprofit status, it would still be required to report what it gives back to the community, and its board says its longstanding mission of being a safety net institution caring for all patients regardless of ability to pay will remain intact.

With 1,865 beds at four acute care hospitals, Lee Health serves 1 million patients annually with 85,000 admissions last year and 276,000 emergency room visits, along with 2.6 million outpatient and physician visits. The system has 15,000 employees.

Lee Health has an unwavering commitment to the community for important health and wellness information, Chris Simoneau, chief development officer, said in a news release about the latest community benefits’ report.

“Our presence goes well beyond medical care,” he said. “We contribute significantly through local partnerships with organizations also committed to the growth and wellness of Southwest Florida and by creating a variety of educational programs with the goal of optimal health for all.”

Details of charity care and other help to the community by Lee Health

Community benefits provide treatment and can promote health but are not provided for marketing purposes, nor are they the cost of doing business.

Here are the key categories for Lee Health:

  • Charity care of $113 million and $88 million of uncompensated Medicaid for a total of $202 million.

  • Community outreach of $71 million.

  • The total of community benefits comes to just under $273 million and subtracting foregone taxes of $94 million, the amount is $179 million.

Some highlights of community impact, according to Lee Health:

  • The Golisano Children’s Hospital’s Child Advocacy team, which includes Kids’ Minds Matter, served 58,313 patients and contributed $660,812 in community benefits.

  • The Lee TeleHealth platform that worked 24/7 after Hurricane Ian free of charge for more than half of the year served 2,476 patients and contributed $170,844.

  • The Lee Health Trauma Center Injury Prevention team saw 7,832 patients and provided $75,213 in community benefit.

  • Family Medicine and Internal Medicine Residency Programs sponsored by the Florida State College of Medicine created a total of $11.9 million in community benefits.

This article originally appeared on Naples Daily News: Did Lee Health meet threshold of giving back to the community?