Taxes, paying for the poor and county funding: How do Macon’s two big hospitals compare?

People passing by the Macon Transit Authority bus stop in front of the Medical Center, Navicent Health, on July 5, don't bother a suitcase left there. The Macon-Bibb County commissioners cut funds for indigent care to the hospital in the most recent revised budget.
People passing by the Macon Transit Authority bus stop in front of the Medical Center, Navicent Health, on July 5, don't bother a suitcase left there. The Macon-Bibb County commissioners cut funds for indigent care to the hospital in the most recent revised budget. bcabell@macon.com

How does Navicent Health compare to Coliseum Health System?

That was one of the questions reader Lynn Farmer asked us through Macon Me Curious, a new project of the Center for Collaborative Journalism in partnership with The Telegraph and GPB Macon.

After the Macon-Bibb County Commission voted not to include the proposed $451,000 for Navicent Health’s indigent care program in its revised budget, Farmer wanted to know why Navicent, a nonprofit hospital, has received county funding in the past, but Coliseum, which is for-profit, has not.

Deciphering the differences between two major hospitals, especially when one is not-for-profit and one is for-profit, can be tricky. The Telegraph looked into this question, plus others from Farmer, so Macon-Bibb County residents can better understand what sets the hospitals apart and how that all plays into the county budget.

How much do the two hospitals pay in taxes?

Navicent Health, Inc. is classified as a 501(c)(3), a nonprofit tax code designation for charitable organizations, according to the Internal Revenue Code. The 501(c)(3) designation can apply to institutions that “are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to animals,” the Internal Revenue Code states.

As a 501(c)(3), Navicent Health is tax exempt, which means it doesn’t have to pay taxes on its dozens of properties, valued at nearly $250 million. Based on the current millage rates, Navicent Health is exempt from paying $3.6 million in taxes to the county, according to an analysis of Macon-Bibb County Tax Assessors data by Georgia Public Broadcasting.

Coliseum Health System, on the other hand, is a for-profit entity and member of HCA Healthcare, a national health care provider based in Nashville, Tennessee, with 178 hospitals and 119 freestanding surgery centers in 20 states across the country and in the United Kingdom, according to its website.

The Macon-Bibb County Board of Tax Assessors’ website lists 13 properties owned by Coliseum Health System, which includes Coliseum Medical Centers and Coliseum Northside Hospital.

Using the “Tax Estimator” tool on the tax assessors’ site, the 13 properties should yield $697,629 in taxes. Coliseum Health System could not provide The Telegraph with an official figure for how much the hospital system spends specifically on taxes to Macon-Bibb County, but a fact sheet provided by the hospital states it contributed $8.5 million in both state and local taxes in fiscal 2017.

How much do the two hospitals spend on indigent care?

Indigent care refers to health care costs covered by the hospital when a patient is uninsured but doesn’t meet the requirements to qualify for Medicaid. About 240,000 Georgians fall into this coverage gap, according to the Georgia Budget and Policy Institute.

In a statement to The Telegraph provided by Navicent Health Public Relations Manager Megan Allen, in fiscal 2017, the hospital provided more than $95.5 million in uncompensated care. However, not all of this spending goes directly to indigent care costs. In addition to what Navicent Health refers to as “charity uncompensated costs,” or the cost of covering indigent care, the hospital is also not compensated for certain Medicaid and bad debt expenses.

Navicent Health disclosed in its 2016 Report To Our Community, the most recent report listed on its website, that the hospital spent a total of $80.8 million in total uncompensated care that year. But of that amount, only $40.3 million went directly to charity uncompensated costs.

Coliseum Health System reported $18.6 million in charity and uncompensated care in a fiscal 2017 report.

How much do the two hospitals give back to the community?

In addition to their medical services, both Navicent Health and Coliseum Health System provide a range of resources to the local community.

Navicent Health offers educational programs, like its annual Stroke Symposium for health care providers and caregivers of stroke patients. The hospital also provides support groups and interest groups for community members. Navicent Health hosts fundraisers and community events throughout the year, such as its annual Reindeer Run and Santa Stroll during the holiday season and its Paint the Town Pink campaign during Breast Cancer Awareness Month each October.

Coliseum Health System contributes corporate funds to both local and national nonprofit organizations, such as the American Heart Association, the American Cancer Society, the Alzheimer’s Association, United Way and NewTown Macon. The hospital also offers educational seminars, health screenings, support groups and various free classes, according to its website.

Did Navicent really make $800 million in profit in 2016?

During the July 3 vote to revise the county budget, Commissioner Mallory Jones argued Navicent Health should not receive a proposed $451,000 for indigent care, citing a 2016 report that the hospital had an $800 million profit in 2016.

According to the “Financials” page in its 2016 community report, Navicent Health had a net operating revenue of $752 million in fiscal 2016, the same about $800 million Jones referenced. On first glance, it’s easy to read this number as a massive net profit.

Jones told The Telegraph the figure he cited at the meeting came from a report by Tyler and Company, a health care search firm. He said he interpreted the about $800 million in net revenue as the money left over after operating expenses.

“I’m not a CPA. I’m not a tax lawyer,” Jones said. “I got one expertise in this world. It’s real estate contracts. That’s my only expertise in the whole world. So, to me, net profit means net profit.”

However, the net operating revenue doesn’t account for the hospital’s operating costs. It’s the hospital’s gross revenue, which was $2.6 billion in 2016, minus its uncompensated billings, $1.9 billion, which includes indigent care, money not reimbursed from Medicare and Medicaid, bad debts and commercial insurance discounts. That number: $752 million.

Below its revenue, Navicent Health lists its operating expenses that year, which totaled $741.2 million. That means the hospital brought in $10.7 million more than it spent to operate in 2016.

So, did Navicent make $10.7 million in profit in 2016? Not exactly.

Just beneath the line in the report that lists Navicent Health’s total operating expenses, the hospital discloses its “Reserve for Re-Investment,” money that carries over into the hospital’s budget for the next year. The amount? $10.7 million.

So, did Navicent Health really run an $800 million profit in 2016? The answer to that question is no.

Samantha Max is a Report for America corps member and reports for The Telegraph with support from the News/CoLab at Arizona State University. Follow her on Facebook at facebook.com/samantha.max.9 and on Twitter @samanthaellimax. Learn more about Report for America at www.reportforamerica.org. Grant Blankenship of Georgia Public Broadcasting contributed to this report.