The Disparities in Charity Care Among Non-Profit Hospitals

Not-for-profit hospitals that have the highest profits do not offer as much in charity care as those hospitals that do not make a lot of money, according to research that was published by the Journal of the American Medical Association.

Overall, non-profit hospitals generated $48 billion in profits and provided $9.7 billion of charity care to uninsured patients and $4.5 billion of charity care to insured patients in 2017, the most recent data available. The top-earning 25% of hospitals accounted for 100% of all the net income for all non-profit hospitals, according to the report. But for every $100 of profit earned by that quartile of facilities, they offered $11.50 of charity care for uninsured patients and $5.10 of charity care to insured patients.

For the remaining 75% of facilities, they offered $72.30 of charity care to uninsured patients and $40.90 of charity care to insured patients for every $100 of net income.

“For both insured and uninsured patients, nonprofit hospitals with superior financial performance provided disproportionately low levels of charity care,” wrote the researchers. “Hospitals in states that expanded Medicaid provided less charity care than hospitals in other states.”

In order to be eligible for not-for-profit status and not have pay income tax on its revenues, non-profit facilities must offer charity or uncompensated care to patients. A report last year found that nearly half of non-profit hospitals are sending bills to individuals for unpaid medical debts even though those individuals qualify for charity or uncompensated care. Those hospitals wrote off nearly $3 billion in unpaid debts to patients who would have qualified for financial assistance.

“Nonprofit hospitals with substantial financial strength should consider more generous financial assistance eligibility criteria to reduce the financial risk exposure of disadvantaged uninsured and underinsured patients,” the researchers concluded.

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