VSP Blog

I’d like to share my thoughts on how tax-exempt status helps not-for-profit healthcare companies deliver the best care to the community.

The core mission of a dedicated healthcare organization is to help patients receive the highest-quality care. And not-for-profit healthcare companies are uniquely structured to achieve this vision.

Since they have no owners, shareholders, or dividends to pay out, not-for-profits reinvest surplus revenue back into the delivery of care rather than removing resources from the system. This provides an important social benefit to the community and delivers the most healthcare for the dollar.

Historically the United States government recognized the value of this community benefit by granting tax-exempt status to not-for-profit healthcare companies. This exemption allowed those companies to invest more resources to expand access to high-quality care.

For more than 40 years, VSP had such an exemption; however the Internal Revenue Service withdrew it in 2003. The decision was puzzling because VSP did not change its business philosophy or commitment to the community. VSP asked the IRS to share the guidelines they use to define what constitutes a tax-exempt, not-for-profit organization. They would not, and VSP sought a court ruling to have its tax-exemption restored.

The Sacramento Business Journal provides a solid overview of the issues in this case. There are broad potential implications for the future of not-for-profit healthcare, and VSP has asked the Supreme Court of the United States to consider this case.

Recently, national media outlets including the New York Times, Fox Business, the Wall Street Journal , and Fortune discussed the case, and I encourage you to consider their perspectives.

If VSP regains our tax exemption, we could devote additional resources now being paid as taxes into our programs that expand the community’s access to the best eyecare. We hope that the Supreme Court recognizes the importance of this case to the delivery of healthcare in the United States.

I look forward to hearing your thoughts.