Financial Disclosure for Tax-Exempt Hospitals

Last December, the Lexington Herald-Leader published a several articles taking a look at the building boom going on in that community. One could discern from the articles that Lexington’s hospitals are doing well financially thank you very much.

Unfortunately, the Courier Journal, once one of the finest newspapers in the nation, is in a death spiral of cost cutting leading to poor and limited content leading to fewer advertisers leading to…well you get the point. One of the CJ’s better reporters, Pat Howington, used to do a great job of reporting on the financial health of Louisville’s hospitals.

Where have you gone, Pat Howington?

Anyway, enough CJ bashing. So, if one were interested, how would you know how our local hospitals are doing? Well, there are at least two ways to gather public information about their finances:

First, one could check GuideStar (www.guidestar.org). Guidestar is a nonprofit organization that keeps an eye on public charities. Our major systems, Norton Healthcare, Jewish Hospital & St. Mary’s HealthCare, Baptist Health System and University Hospital all file a federal tax return, called a Form 990.

The Form 990 is full of interesting information including how the hospital defines¬†its charitable mission, its financial position and results of operations, payments made to insiders and material suppliers and it’s compensation of key executives. However, the information is usually dated because of the filing practices of the hospitals.

The 990 is due five and half months after the end of the hospital’s fiscal year and can be extended another five months. Every hospital extends the 990, in part because it is difficult to prepare and,¬†sometimes, to delay public disclosure. Right now, the latest 990 on file for Jewish, Baptist and University is the 2008 return, while Norton’s 2007 return is the latest available.

More current financial results may be found at the Municipal Securities Rulemaking Board‘s electronic municipal market access (EMMA) website. Using this site, you can gain an understanding of the levels of tax-exempt debt each organization has outstanding. Further, issuers of tax-exempt debt must report current financial results through EMMA. Usually, the information is no more than six months old.

So, consider yourself empowered to research the financial health of our local hospitals.

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