Nonprofit hospitals receive taxpayer subsidies, including exemptions from federal and state income taxes, property tax, and sales tax, as well as the privilege of receiving tax-deductible charitable contributions and issuing tax-exempt bonds.

To qualify for these subsidies, nonprofit hospitals must pursue charitable missions as defined by the Internal Revenue Service (IRS).

Using 2019 IRS data, Ge Bai and coauthors determine that the 37.3 percent of US nonprofit hospitals that compensate their trustees have lower charity-care-to-expense ratios than those that do not compensate their trustees.

While average trustee compensation across all US nonprofit hospitals increased by 46 percent from 2011 to 2019, the average charity-care-to-expense ratio decreased by 21 percent.

While the IRS does not have requirements for trustee compensation for nonprofit hospitals, Ge Bai and coauthors assert, “The public and policy makers should understand the fiduciary duties of nonprofit hospital trustees and the potential implications of excessive trustee compensation.”

In a continuation of the Forefront series on Accountable Care for Population Health, Fang He examines the relationship between the rise of alternative payment models and the rapid consolidation of health care providers.

The series, produced with the support of Arnold Ventures, will run throughout 2023, and submissions will be accepted on a rolling basis.

Elsewhere in Forefront, Lisa Iezzoni remembers the life of her friend Michael Ogg, and his experiences with Program of All-Inclusive Care for the Elderly (PACE).

Rick Mathis provides a detailed review of the book Bioethics Reenvisioned by Nancy King and coauthors, which provides an expanded approach to health justice that incorporates insights from social sciences, epidemiology, and public health.

Read more on Forefront and learn more about how you can contribute to the publication.

About Health Affairs

Health Affairs is the leading peer-reviewed journal at the intersection of health, health care, and policy. Published monthly by Project HOPE, the journal is available in print and online. Late-breaking content is also found through healthaffairs.org, Health Affairs Today, and Health Affairs Sunday Update.

Project HOPE is a global health and humanitarian relief organization that places power in the hands of local health care workers to save lives across the globe. Project HOPE has published Health Affairs since 1981.

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