The Latest Research, Commentary, And News From Health Affairs
Tuesday, April 20, 2021
Dear John,
A new analysis shows that
the amount of charity care delivered by government, nonprofit, and for-profit hospitals does not align with the tax treatment they receive.
Hospital Tax Benefits Don’t Always Align With Charity Care
Government, nonprofit, and for-profit hospitals have different charity care obligations arising from their respective tax subsidies, tax exemption, and tax obligations. This tax treatment implies that government hospitals have the greatest obligation for charity care,
while for-profit hospitals have the least.
In a Health Affairs article featured in prominent publications like the Washington Post, STAT, and Bloomberg, Ge Bai and colleagues compared charity care in 2018 across government, nonprofit, and for-profit hospitals.
They found that, among Medicare-certified general acute care hospitals, the nonprofit hospitals provided the least aggregated charity care. For every $100 of expense incurred, nonprofit hospitals spent less on charity care ($2.3) than for-profit hospitals ($3.8) or government hospitals ($4.1). In nearly half, 46 percent, of the areas with all hospital types, government or nonprofit hospitals contributed a lower proportion of expenses to charity care than for-profit hospitals.
All together, these results suggest that government, nonprofit, and for-profit hospitals’ charity care provision relative to their total expenses did not align with their charity care obligations arising from their tax treatment.
Check out our April 2021 issue for content
about the ACA, spending, and more.
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ACA Closed Health Coverage Gaps For Pregnant Women. There’s Still A Long Way To Go
Listen to Editor-in-Chief Alan Weil interview Emily Johnston from the Health Policy Center at the Urban Institute. Johnston shares insights from her latest research on
women’s loss of Medicaid in the weeks before or after pregnancy.
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