Report shows hospitals provide $990 million in benefits to state's communities

WILLMAR -- Hospitals in southwestern and west-central Minnesota last year provided an estimated $103.9 million in community benefits ranging from patient support groups to free care.

WILLMAR -- Hospitals in southwestern and west-central Minnesota last year provided an estimated $103.9 million in community benefits ranging from patient support groups to free care.

The figure is contained in a new statewide report, released Wednesday, detailing the economic and community impact of Minnesota's hospitals.

It is the first time the state's hospital industry has attempted to use uniform standards that measure hospital services and programs that provide a benefit.

What's defined as a community benefit: services that meet a community need that might not otherwise be provided, services that reach out to those who are low-income or underserved, and services that promote health but tend to generate low profit or are money-losers.

"This report allows us, for the first time, to quantify the benefit hospitals provide to their communities -- through offering free care, supporting community services, employing thousands of people and purchasing goods and services," Bruce Rueben, president of the Minnesota Hospital Association, said in a statement Wednesday.


The Minnesota Hospital Association issued the report, which is titled "Minnesota Hospitals: Serving and Strengthening Our Communities."

The report shows Minnesota hospitals collectively provided $990 million in community benefits and free care in 2005.

"We've known all along we do this," said Bill Fenske, chief financial officer of Rice Memorial Hospital in Willmar.

Now, the city-owned hospital can attach a number to it, he said.

"It helps us be able to communicate to people what we do here," he said. "There's a lot of things we do that the public doesn't quite see, that's not direct patient care but is for the health of the community and the education of the community. It's important and it all costs money to do it."

Rice Hospital provided more than $11 million worth of services in 2005 that were considered a community benefit.

What's included: services such as asthma clinics, hospital-sponsored support groups for patients, and a bereavement center.

Also included is hospital support for initiatives aimed at strengthening the future health care work force -- among them a job shadowing program for high school and college students, summer internships for nurses, and subsidies for the Southern Minnesota Area Health Education Center and the West Central School of Radiology.


The report also helps quantify the payment gap between what Medicare and Medicaid reimburse and what it actually costs to provide care.

Medicare is the federal health insurance program primarily for people 65 years of age or older. Medicaid is the joint federal and state program that helps pay medical costs for people with low incomes.

Hospitals in southwestern Minnesota, where Medicare typically accounts for more than half of the patient volume, reported $46 million in costs that were in excess of Medicare payments in 2005.

"I think it's good to know the significant underfunding by governmental programs," Fenske said.

Regional hospitals -- including the hospitals in Montevideo, Olivia, Granite Falls, Dawson and Redwood Falls -- also reported providing $1.6 million in outright charity care in 2005 and another $11 million worth of care that was written off to bad debt.

These hospitals contributed 3,874 jobs to the regional economy, with wages totaling $118,400.

Collectively, Minnesota hospitals spent $5 billion last year on salaries and benefits for more than 100,000 workers and spent $2.5 billion on goods and services.

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