City’s Second Largest Employer a Tax Drain on Community

The Berkeley, CA. City Council Tuesday night voted nearly unanimously to call on the city’s second largest employer, Sutter’s Alta Bates Summit Medical Center to fulfill its charity care obligation in exchange for the substantial public financing they receive through their tax exempt status.

Alta Bates Summit with two campuses in Berkeley, is seen as a prime example of a hospital that receives government subsidies as a result of its tax-exempt status that are far beyond what it provides in charity care – a growing problem throughout California.

Statewide, California non-profit hospitals received nearly $2 billion in public subsidies beyond what they provide in charity care, according to a study last year by the California Nurses Association/National Nurses United.

Alta Bates Summit, a CNA researcher told the council, made $110 million in net income/profits in 2010, received $53.2 million in public subsidies as a result of its tax status, yet provided only $4.8 million in charity care.

A number of Alta Bates Summit RNs attended the meeting, spoke in the public hearing, and celebrated the vote as a big step forward in holding Alta Bates and similar hospitals accountable to the public.

"It's encouraging to participate in such a strong community response, the support is clear: Berkeley residents deserve real accountability which translates into real benefits that impact the daily lives of our patients," said Alta Bates RN Rochelle Pardue-Okimoto.

"As a patient advocate, it is my job to give a voice to those who are sick, in pain and in need. As a neighbor, it is my job to look after my community and neighbors and I have serious concerns about the lack of support we are receiving from our neighbor, Alta Bates," said Alta Bates RN Deborah Thompson, a 25-year Berkeley resident told the council.

The resolution, passed on a 7-1 vote, calls on Alta Bates Summit to provide an Annual Report to City Council to include specific detail on the qualified charity care reported.

It also calls for a City Council work session to provide information to Council and the community about ABSMC's tax exempt status. That session would include a presentation by Alta Bates Summit Medical Center (ABSMC) regarding the community benefits and charity care provided to Berkeley residents.

California’s legislature will take up a bill again in January that would clearly definite charity care to ensure it is based on actual care for indigent patients, not marketing or cost cutting schemes, and assure greater transparency. Assembly member Bob Wieckowski of Fremont is the lead author of the bill, AB 975.