- The nation’s top nonprofit hospitals have seen increased revenue since the Affordable Care Act (ACA) was implemented, but have spent considerably less on charity care in that time, according to a Politico analysis published Monday.
- The top seven hospitals (per U.S. News & World Report rankings) had a combined revenue increase of 15% over two years after the ACA’s coverage expansions, but their charity care spending went down 35%.
- Nonprofit hospitals fought tooth and nail as the ACA was being crafted to keep their tax-free status, and continue lobbying for the exemptions, but critics question whether the organizations are doing enough to benefit their communities.
The role of nonprofit healthcare organizations and what they should be required to do in order to retain that status is a frequent topic for the industry, where there are three times as many nonprofit hospitals as for-profit ones.
High executive compensation has raised concerns for some. Nonprofit executives in general are seeing their salaries increase, and many of the top nonprofit earners are from health systems. However, nonprofits have many of the same struggles as for-profit hospitals such as declining reimbursement rates and rising labor and drug costs. Nonprofit hospital finances were strengthening in 2014 and 2015, but have more recently slowed, in part because of those factors, according to Moody’s.
Nonprofits must “serve the healthcare needs of the community,” but this vague definition has led to controversy. Under the ACA, nonprofits are required to submit a Community Health Needs Assessment every three years, and must make the report widely available. But disagreements remain, and have led to lawsuits in some cases.
Nonprofit status has been largely absent in the discussions surrounding healthcare legislation currently being considered in Congress, but industry organizations certainly stand ready to continue fighting the issue. The latest reporting from Politico could add fuel to the fire.