Even though they are receiving exemptions from having to pay their taxes because of the amount of charity care they are supposed to be providing, nonprofit hospitals provided less charity care than for-profit hospitals, according to the details of a study released earlier this week.
Looking at data from 2018, nonprofit hospitals offered $2.30 in charity care for $100 in total spending, compared with $3.80 for for-profit hospitals, and $4.10 for government-run facilities, according to the data, which was published in Health Affairs.
Further, in nearly half of the areas where all three types of facilities are present — government and nonprofit hospitals had a lower aggregate charity care-to-spending ratio than for-profit institutions.
“These results suggest that many government and nonprofit hospitals’ charity care provision was not aligned with their charity care obligations arising from their favorable tax treatment,” according to the authors of the study, who looked at the data from more than 4,600 hospitals nationwide.
Among the recommendations made by the report’s authors to help spur more charity care were to publicly rank hospitals based on the amount of charity care they provide, or some metric to illustrate that figure, or requiring nonprofit and government hospitals to meet some pre-determined threshold in order to maintain their nonprofit status.
The data highlighted in the report is not necessarily a new trend. Last year, a report in the Journal of the American Medical Association revealed that nonprofit hospitals that made more money were likely to have significantly lower levels of charity care provided.
Last December, Sen. Chuck Grassley [R-Iowa], the former chairman of the Senate Finance Committee, called for greater scrutiny of hospitals that have 501(r) nonprofit status from the Internal Revenue Service, after reports were released about the “aggressive” collection practices at some nonprofit hospitals.
