Funding technology: evaluating and exercising the leasing option

Tax-exempt capital leases, when structured through the appropriate conduit authority, are an excellent option for financing equipment that the hospital wants to own. Operating leases offer the benefits of immediate cash flow savings when compared with buying equipment, fewer complications and lower upfront costs when compared with bond issues, and the ability to match short-term assets with short-term liabilities. A best-practice leasing process involves nine steps progressing from assessing needs and soliciting bids from equipment manufacturers to implementing the lease and providing continuing disclosure.

Employment-Based Health Insurance: Past, Present, And Future

We review the rise, stabilization, and decline of employment-based insurance; discuss its transformation from quasi-social insurance to a system based on actuarial principles; and suggest that the presence of Medicare and Medicaid has weakened political pressure for universal coverage. We highlight employment-based insurance's flaws: high administrative costs, inequitable sharing of costs, inability to cover large segments of the population, contribution to labor-management strife, and the inability of employers to act collectively to make health care more cost-effective. We conclude with scenarios for possible trajectories: employment-based insurance flourishes, continues to erode, or is replaced by a more comprehensive system.

Tax Subsidies For Employment-Related Health Insurance: Estimates For 2006

Employment-related health insurance is subsidized through exemptions from federal and state income taxes, as well as from taxes for Social Security and Medicare. Proposals to modify this subsidy are a perennial subject of policy debate. We present tax-subsidy projections from a new data resource constructed using a statistical linkage between the establishment and household components of the Medical Expenditure Panel Survey (MEPS). We project that the total federal and state tax subsidy in 2006 for employment-related coverage of active workers will exceed 200 billion dollars. We present per worker tax-subsidy estimates and an analysis of insurance incidence by establishment characteristics.

Defining and measuring community benefit

Defending their tax-exempt status, not-for-profit hospitals must find tangible means to demonstrate the many ways they care for their communities.

Massachusetts reform plus President Bush's tax credits: a national model?

The Massachusetts health reform offers an important opportunity for a new federal-state strategy to cover the uninsured. President George Bush's proposed health insurance tax credits could be added to the Massachusetts health reform. The combined plan would include Medicaid expansions; offer workers affordable coverage through competitive insurance markets; and provide federal, state, employer, and individual financing. Many other states might be interested in similar federal-state partnerships for the forty-five million uninsured Americans. Ending the national impasse on coverage needs this kind of bold initiative.

Tax-exempt private placements: a new opportunity for not-for-profit providers

Tax-exempt private placements offer an attractive financing alternative for not-for-profit healthcare providers for which the public debt market is no longer a viable option. They offer the following advantages: Greater flexibility Lower fees. Less paperwork. Fewer players. Shorter time to complete.

Playing by the rules: what you should know about revisions to Form 990

The revised Form 990: Return of Organization Exempt from Income Tax includes new questions about compensation, driven by concerns about excessive executive compensation among tax-exempt organizations. Tax-exempt hospitals should review Form 990's revised reporting requirements and ensure that their forms are filled out accurately and completely in order to avoid potential penalties and scrutiny.

Tax preferences for nonprofits: from per se exemption to pay-for-performance

Defenders of tax preferences for nonprofit hospitals and health plans, including Mark Schlesinger and Brad Gray, contend that nonprofits deserve government support because they provide greater "community benefit" than their for-profit counterparts. This argument is unconvincing. There is some evidence that nonprofits deliver marginally more "community benefit" but no evidence that tax exemption is the cause. Absent proof that tax expenditures, including exemption, "buy" social benefits that are worth the cost to taxpayers, these expenditures are unjustified. The better course would be to pay nonprofits for performance, by tying tax benefits to accomplishments (beyond current achievements) in health promotion, quality, and care for the needy.