To the editor:
The story of the sale of St. Mark's Hospital described in Chris Allen's letter, July 19, has raised a question in my mind that bears on the issue of tax exemption for non-profit hospitals.When St. Mark's was sold last year, its reserve fund of about $28 million was kept by the former owner, the Episcopal Church. That fund was built up over the years while St. Marks was tax exempt, so the taxpayers have indirectly contributed to that fund. There would have been substantially less money in that fund had it not been for the tax exemption we gave to St. Mark's Hospital.
To be tax exempt, a hospital is supposed to be non-profit. We allowed St. Mark's to accumulate that fund on the understanding that it was to be used for the replacement of hospital buildings and equipment as it wears out. The money was supposed to be for health care, but instead it has gone to a church.
This raises a question about what happened 13 years ago when Intermountain Health Care was created. In 1975 the LDS Church set up IHC, hand picking its 15-member board of trustees. It then dissolved the Church's Health Services Corporation and transferred its 15 hospitals to IHC along with the debts owed by the hospitals.
Did Health Services Corporation have a reserve fund, and did the LDS Church keep it? If so, that fund could easily have contained many millions of dollars.
I think we ought to have an answer to that question before we approve any more tax exemptions for IHC. IHC's board of trustees is still predominantly loyal to the LDS Church. Nothing prevents the church now from setting up another corporation, and then calling on IHC to dissolve itself, transfer its assets and debts to the new corporation, and give its reserve fund to the church.
Salt Lake City
Editor's Note: When the LDS Church dissolved its Health Services Corporation, it transferred all assets to Intermountain Health Care.