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Rice issues annual community benefit report

WILLMAR -- Rice Memorial Hospital provided $17.8 million worth of community benefits -- ranging from charity care to free support groups and health fairs -- in 2006, according to a report released Wednesday to the hospital board of directors.

The amount represents 20.9 percent of the city-owned hospital's operating expenses for the year.

It has been rising slightly every year, said Bill Fenske, chief financial officer at Rice.

"For this year it'll grow a little bit more," he said.

The report is an attempt to measure the ways in which nonprofit hospitals serve their community and to hold them accountable for their tax-exempt status.

Altogether, 130 hospitals in Minnesota compiled the numbers in 2006, reporting a combined $2.7 billion in community benefits.

"The magnitude of the dollars is always astronomical," Fenske said.

For Rice, the biggest share by far is the cost of providing care under Medical Assistance and Medicare in excess of what these two government-funded programs pay.

Fenske and his staff calculated that for Medicare, the hospital in essence underwrote $8.8 million worth of costs in 2006. For Medical Assistance, it was $4.1 million.

The hospital provided $453,190 in charity care and another $1.7 million in programs and services such as free clinics, support groups and student job-shadowing experiences.

On top of that, the report added $2 million in care that was written off as bad debt, and $700,000 split between the MinnesotaCare tax and a payment in lieu of taxes to the city of Willmar.

It's hard to put a value on some of the services a community hospital can offer, said board member Doug Allen.

Allen, the president of Ridgewater College, said the benefits to the college's students in the health professions are "incalculable."

"Without the clinical sites, we don't have a program," he said. "There's a lot of other benefits we can't quantify that are really significant."

Hospitals in Minnesota have been reporting the information since 2005. They're all required to calculate it the same way.

The reporting structure was revised this past year and some of the deadlines were extended. Future reports will be provided earlier in the year, most likely in summer.

According to the Minnesota Department of Health, Minnesota hospitals provided $125 million more in community benefits in 2006 than the total value of their tax-exempt status.