- The American Hospital Association (AHA) has released a report that says hospital community benefits outweigh the value of their tax exemption by a factor of 11 to one.
- The analysis, performed by Ernst and Young at AHA’s request, used 2013 data from tax forms, community benefit reports and Medicare cost reports from nearly 3,000 non-profit general hospitals.
- More than half the value of the community benefits were from financial assistance, unreimbursed Medicaid and unreimbursed costs from other means-tested government programs, according to the report.
AHA is eager to find data supporting the value hospitals have to their communities. Many hospitals are going through tough times financially as patient volume lowers and reimbursements decrease. Rural hospitals in particular are vulnerable, but they can be very valuable to the people living around them.
“Today, hospitals of all kinds — urban and rural, large and small — are demonstrating the value they provide and solidifying their commitment to making their communities healthier through strengthened community partnerships, health and wellness programs, and outreach activities designed to combat identified community needs,” AHA President Rick Pollack said in a statement.
Hospitals have to take a number of steps to support their tax-exempt status. Most facilities don’t have trouble meeting these requirements, but last month the IRS — for the first time — revoked tax exemption from a hospital. Gary Young, director of Northeastern University’s Center for Health Policy and Healthcare Research, told Healthcare Dive that was an extreme case, but could signal a step up in enforcement. “It may certainly send some chills down the spines of some hospital managers,” he said.
Non-profit hospitals have faced questions about high executive salaries and occasionally significant revenue. The AHA report could ease some of those concerns.