To our shame, 46 million people in this country lack health care coverage, and 800,000 of them reside in this state. A similar number of Marylanders have inadequate coverage. Though we are the nation's second-wealthiest state, officials have rejected proposed improvements in health care as too expensive, and it has been nearly impossible to build the consensus necessary for reform.
Happily, it turns out that we've already allocated our health care system much of the money it needs. Hardly anyone has heard of community benefit dollars, but they're ours to use. Here's how.
The Internal Revenue Service requires that nonprofit hospitals spend community benefit funds at the recommended rate of 5 percent of their total operating costs. Nationally, this obligation is largely fulfilled through charity care: Whenever a patient cannot pay for his or her care, the hospital applies the costs for service toward its community benefit total.
In Maryland, however, 98 percent to 99 percent of hospitals' charity care expenses are reimbursed by a state-mandated surcharge on all hospital bills. To satisfy the IRS requirement, Maryland's hospitals spend about $500 million annually on an array of other community benefits. The only requirement for that discretionary money? That these expenditures demonstrate a charitable health care-related purpose.
This unusually lax IRS mandate is startling. What's more problematic is that these millions are split into $5 million or $10 million single-hospital chunks. Hospitals are not responsible for planning or services outside of their frequently overlapping service areas, so they spend their community benefit funds on local initiatives such as health education, physician subsidies and - bear this one in mind - community health services.
All of these are good and noble programs that I have fought for and implemented on city and county levels. Most local hospitals do an excellent job of taking care of their communities. But coordination of community benefit spending across the state would make our health care system much more effective. The numbers in the community benefit reports required from hospitals by the Maryland Community Benefit Commission show how fragmented our efforts are.
These reports also demonstrate the tightest-kept secret of community benefit dollars: Hospitals' numbers are completely unaudited. No government program is allowed off the hook so easily when preparing its budget.
Make no mistake: These hospitals are tax-exempt, and the money they spend on community benefits belongs to taxpayers. Surely it can be more effectively used for the benefit of all citizens.
In sum, Maryland's hospitals spend $500 million each year on piecemeal provision of community health programs and health education services. Consider how many times the wheel is reinvented to create essentially the same program in different counties. Consider the overhead costs and the gaps and overlaps in coverage. Consider that for about $200 million more than our current community benefit expenditures, we could provide quality health care for every uninsured man, woman and child in Maryland.
In community benefit dollars, Maryland's health care goose has laid a golden egg. Leadership at the state level could use these funds to make any of the recent health care reform proposals a reality at an appealingly minimal cost to taxpayers.
It is past time to take a very close look at this promising source of health funding.
Dr. Peter Beilenson, the former health commissioner for Baltimore, is the health officer for Howard County. His e-mail is pbeilenson@howardcountymd.gov.