- More than three-quarters of nonprofit hospitals studied by the Lown Institute, a healthcare think tank, spent less on charity care and community investment than the money they received in the form of tax breaks, according to a new report from the organization.
- Known as “fair share” deficit, this shortfall totaled $14.2 billion in 2020. For hospitals in Massachusetts, Minnesota, Rhode Island and Washington D.C., the amount could pay off all medical debt noted on residents’ credit reports.
- UPMC Presbyterian Shadyside in Pittsburgh, Pennsylvania, had the largest fair share deficit at $246 million, while the hospital with the biggest surplus was New York Presbyterian Hospital in New York City at $117 million.
The Lown Institute examined tax records, audits and CMS cost reports of 1,773 nonprofit hospitals to calculate fair share spending, and also looked at COVID-19 relief funding they received. UPMC Presbyterian Shadyside, for example, got $56 million in relief funds.
The report also looked at how many rural hospitals could have their losses covered by fair share deficits. In 41 states, it would be enough to wipe out the net losses for all rural hospitals in the state in 2020.
Nonprofit tax breaks have been on the rise, increasing more than 40% over nine years to reach $28 billion in 2020, according to the Kaiser Family Foundation.
Many hospitals did, however, expand eligibility for charity care during the COVID-19 pandemic, though policies were vague, according to a report in JAMA.
Meanwhile, KFF reports that an estimated 41% of U.S. adults have medical debt, with underserved populations being the most affected. And most of that debt is owed to hospitals. About half of adults say they would be unable to pay a $500 medical bill without borrowing money.
These discrepancies have led to criticism from lawmakers as well as media investigations. Wisconsin Sen. Tammy Baldwin earlier this year accused Ascension of operating more like a private equity fund than a hospital, targeting its charity care spending habits.
The Oregon Department of Justice launched a probe into Providence Health & Services after a New York Times investigation found the hospital was aggressively billing patients who should have received free or discounted care.