Tax-exempt hospitals provided $95 billion in total benefits to their communities
A new analysis prepared by Ernst & Young LLP (EY) and released by the American Hospital Association (AHA) shows that tax-exempt hospitals provided $95 billion in total benefits to their communities in 2016 alone, the most recent year for which comprehensive data is available. This means that hospitals’ and health systems’ community benefit activity outweighs the value of their federal tax exemption – which was $9 billion in 2016 – by a factor of nearly 11 to one.
“On top of delivering around-the-clock care to all who come to us, hospitals and health systems of all types are providing a wide range of comprehensive benefits, activities and services tailored to meet the specific needs of their patients and communities,” said AHA President and CEO Rick Pollack in a news release. “These new reports clearly quantify the significant benefit tax-exempt hospitals and health systems provide to their communities.”
AHA reported that an additional analysis shows hospitals’ and health systems’ total community benefits were 13.7 percent of their total hospital expenses in 2016. Half of this total was attributed to expenditures for financial assistance for patients and absorbing losses from Medicaid and other means-tested government program underpayments.
In return for being exempt from federal taxes, non-profit hospitals have a special responsibility to deliver a variety of benefits to serve the needs of the communities they serve. Hospitals report publicly on community benefit activities, which include financial assistance for those in need, as well as a wide range of programs and services designed to meet the current and future health needs of all those they serve. In addition, hospitals and health systems support emergency preparedness for all types of disasters; education, research and training for the next generation of caregivers; and clinics for underserved communities, as well as a range of programs aimed at keeping their communities healthy and productive.
