RIVERSIDE HOSPITAL LOCATED AT CENTER OF CONTROVERSY ON NONPROFIT\FACILITIES.

Byline: Douglas E. Beeman Riverside Press-Enterprise

Eisenhower Medical Center is a monument to the rich and famous. Cowboy movie star Gene Autry's name graces the main hospital tower. Comedian Bob Hope's wife, Dolores, has her name on an outpatient center.

Eisenhower's 100-acre campus and its buildings are worth more than $200 million. On this, Eisenhower pays almost no property taxes. It paid no taxes on the more than $9 million it netted in 1993, either. It doesn't have to. Eisenhower is a nonprofit hospital, one of seven in Riverside County.

Yet when it comes to providing care to the poor - part of a nonprofit hospital's charge - Eisenhower devotes a fraction of its resources to treat the poor compared with a competing for-profit, tax-paying hospital in Indio.

Therein lies the essence of a growing national debate over whether nonprofit hospitals give enough back to their communities to justify millions of dollars in tax breaks. Tax collectors and for-profit hospitals around the country are challenging those tax exemptions and forcing nonprofit hospitals to quantify the charity care and free services they say they provide.

"We really do not operate any differently than a not-for-profit," said Dan Dredla, marketing director of the for-profit Inland Valley Regional Medical Center in Wildomar. His hospital provides as much or more charity and indigent care as a competing nonprofit hospital in Murrieta, state data show.

"We still have to go out as a moral obligation and provide a benefit to our community," Dredla said.

Eisenhower avoids annual property taxes of $2 million by virtue of its nonprofit status. That doesn't count state and federal income taxes it is exempt from paying. Eisenhower officials say their hospital benefits the community by providing care to the people living in the mid-Coachella Valley area.

Eisenhower officials also point out that as a nonprofit enterprise the hospital has no shareholders to worry about, so it can reinvest its profits in the hospital.

"When we benefit, the community benefits. We don't pass anything on to shareholders," says William Dunn, Eisenhower's director of financial planning.

Federal and state laws provide nonprofit hospitals wide latitude in what they count as their community benefit. The list can include anything from free care to the poor, to the cost of training new physicians, to free meals to shut-ins. But the federal government generally emphasizes programs for the medically needy.

"If a suburban hospital is not doing anything other than health fairs, it's probably going to have a problem" defending its tax exemption, said Marcus Owens, director of the Internal Revenue Service's exempt organizations division. "There needs to be some component that's looking at serving the medically underserved."

States like Texas are starting to narrow the definition. Texas now requires nonprofit hospitals to spend up to 5 percent of their net revenues on charity care for the poor and programs to improve community health.

California is only now beginning to examine nonprofit hospitals.

Starting this year, nonprofit hospitals like Eisenhower must spell out what they do for their communities, and how they will meet the communities' most pressing needs.

"Those who have enjoyed tax-exempt status in the past are going to be asked to demonstrate more clearly in the future what they're doing in order to deserve that status," said Bud Lee, president of the California Association of Catholic Hospitals.

Riverside County's seven nonprofit hospitals together would pay more than $6 million a year in property taxes but for their tax-exempt status, according to records in the county assessor's office. That's about enough money to operate the county library system.

Nonprofit hospitals pay taxes on property used for such things as doctors' offices, but those amounts are typically small compared with the value of exempt property. Nonprofit hospitals also are exempt from state and federal income taxes.

In exchange for the tax breaks, those hospitals are supposed to take all patients regardless of their ability to pay. All do - some more than others. And some hospitals do more than others to care for the poor or improve the health of their communities.

Riverside's Parkview Community Hospital, for example, fed shut-ins, examined and treated rape victims for free, and spent about $300 to $400 a month on taxi rides to take poor patients home, said Priscilla Webster, Parkview's vice president of nursing services.

The county's sharpest contrast between for-profits and nonprofits may be between two desert hospitals named for U.S. presidents: the for-profit John F. Kennedy Hospital in Indio, and the nonprofit Eisenhower Medical Center in Rancho Mirage.

JFK serves the impoverished southern end of the Coachella Valley, where Indio's 1994 median income was $31,594. Eisenhower serves the valley's wealthy mid-section. Median income in Rancho Mirage: $48,235.

JFK's patients are predominantly Medi-Cal, the state-federal health insurance for the poor; Eisenhower's are predominantly Medicare.