A new report examining the finances of 1,710 nonprofit hospitals in the United States finds that more than three-quarters fall short on expected investments in their communities.
Nonprofit hospitals are exempted from paying most federal, state, and local taxes in exchange for providing free or discounted care and programs that address community health needs, like substance abuse treatment, affordable housing, or access to healthy foods.
Lown Institute analysts identified more than 1,300 hospitals that have “fair share” deficits, meaning that the value of their community investments fails to equal the value of their tax breaks. The combined deficits of nonprofit hospitals totaled $14.7 billion in 2020, enough to relieve the medical debt of 18 million Americans or prevent 600 at-risk rural hospitals from closing.
The Lown Institute calculated fair share spending based on 2020 IRS Form 990 by comparing the estimated value of hospitals’ tax exemptions to the amount spent on financial assistance and meaningful community investment—including community health improvement activities, contributions to community groups, community building activities, and subsidized healthcare services.