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The AP analysis was based on public records of property taxes and charity care. The law works like this: For-profit hospitals will be able to offset their Illinois income tax by the amount of their local property taxes, or the amount of free and discounted care they provide to the poor, whichever is less.

If that number is more than the hospital’s income tax liability _ and for many hospitals it will be _ the hospital will be able to sell all or part of their tax credit to other businesses, according to the Department of Revenue. Hospitals also will be allowed to carry forward any excess credit and apply it to their tax liability for five tax years.

When Quinn signed the bill, he said he hoped it would result in more charity care. The tax credit, the governor hoped, would be an incentive for hospitals to do more for the poor.

Many of these hospitals already provide more charity care than they pay in property taxes, according to the AP analysis, although a few specialty hospitals report they provide none. Wilhelmi said the tax break possibly could motivate those hospitals to provide at least some free care.

A Tennessee-based hospital company will get the bulk of the tax credit.

Vanguard Health Systems Inc., which will reap an estimated $5.5 million annually in tax credits for its four Illinois hospitals, posted a profit of $57.3 million in fiscal 2012 after losses the previous two years, and its revenue rose 30 percent to nearly $6 billion, due partly to hospital acquisitions.

Sonja Vogel, a spokeswoman for Vanguard Health Chicago, sent AP an email statement that cited “significant challenges” investor-owned hospitals are facing in Illinois. She said the company had provided $6.45 million in charity care and paid more than $12 million in state and local taxes last year despite cuts in Medicaid and Medicare reimbursements and a state budget she called “unreliable.”

Margaret Storey represents parents of medically fragile children who are fighting a $15 million reduction to part of the Medicaid program that helps them. Coincidentally that cut equals the hospital association’s cost estimate for the tax credit.

“To know that tax credits were being given away at the same time these children’s future with their families is being put at risk is just appalling,” Storey said. “It makes you lose a little faith in your government when those kinds of deals get cut.”


AP Medical Writer Carla K. Johnson can be reached at