Should hospitals that do some unpaid work be considered "charitable" for taxation purposes?

The Illinois Supreme Court has ruled that a Catholic Medical Center was not a "charitable organization" and was thus required to pay taxes.  The court ruled that the charity care provided by Provena Covenant Medical Center was "too paltry" to permit the non-profit to qualify for a tax exemption.  The justices said that the hospital "failed to show by clear and convincing evidence that it...dispensed charity to all who needed it and applied for it."

Disagreements about the level of charity care that an entity provides can effect more than just taxes.  Many states permit charitable entities to avoid responsibility for harm that they cause due to their carelessness.  For example, the Virginia Supreme Court has ruled that the University of Virginia Medical Center was not entitled to charitable immunity in part because of its aggressive collection efforts against those who received medical care but could not pay.  On the other hand the Supreme Court ruled, in denying an appeal in a negligence case, that Didlake Inc. was entitled to the protection of charitable immunity.  When an entity is entitled to the protection of charitable immunity this means that anyone who is hurt by that entity must bear their own losses for the "good of society".

Our question is:  Is this still a good idea?

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Ben Glass
Ben Glass is a nationally recognized Virginia injury, medical malpractice, and long-term disability attorney