KFF analysis reveals the estimated worth of tax exemptions for nonprofit hospitals in 2020 was $28 billion, exceeding estimated charity care prices of about $16 billion amongst these hospitals. Source: Chart by KFF, accessed June 8, 2023. Reprinted with permission
Up to now this yr, hardly every week goes by with out an article or report on egregious actions by nonprofit hospitals. Whereas the actions aren’t new, a number of elements have mixed in 2023 to boost the extent of scrutiny.
Tales about what the nonprofits have been as much as are related to audiences throughout the nation as nearly 3,000 of the nation’s 5,157 hospitals are nonprofits, which means the IRS views them as charities in the event that they meet federal and state guidelines. Beneath these pointers, nonprofit hospitals are exempt from paying federal and state revenue tax, gross sales tax, and property tax, and get different tax-related advantages akin to the flexibility to concern tax-free bonds, as researchers in Health Affairs reported in 2021. These pointers imply that nonprofit hospitals are held to greater requirements than the two,157 for-profit and public hospitals.
Nonprofit hospitals are an vital story to cowl for these 4 causes:
- Whereas nonprofits don’t have to pay federal or state taxes, they nonetheless generate revenue, as Michelle Crouch reported in April for North Carolina Well being Information and the Charlotte Ledger. Property that Atrium Well being owns in Charlotte, N.C., homes a PDQ fried rooster restaurant. “You’ll pay taxes whenever you purchase the rooster tenders, however Atrium doesn’t pay taxes on the land the restaurant sits on,” she wrote.
- In alternate for not paying revenue or property taxes, hospitals say they supply thousands and thousands in discounted medical care to the underserved. However when well being care journalists overview the funds and charity-care spending of those amenities, nonprofit hospitals usually fail to satisfy these necessities. In a report in March, KFF researchers estimated the worth of tax exemptions for nonprofit hospitals was about $28 billion, exceeding the estimated charity care prices of about $16 billion amongst these hospitals in 2020.
- A June report from Human Rights Watch reveals how lax federal oversight permits non-public tax-exempt hospitals to spend far much less on well being take care of the poor than the general public subsidies they get. Such tax exemptions are designed to extend entry to take care of uninsured and underinsured sufferers, however these subsidies are poorly regulated. This enables for abusive medical billing and debt-collection practices, in keeping with the report.
- For KFF Health News, Andy Miller and Markian Hawryluk reported in July that greater than a dozen states have thought of or handed legal guidelines to outline charity care extra particularly, to enhance transparency about the advantages hospitals present, or to set minimal monetary thresholds for charitable assist in the communities the hospitals serve.
Rising charges of shopper medical debt has elevated curiosity from lawmakers, the general public and journalists, Miller and Hawryluk reported. Greater than 100 million Individuals have medical payments they’ll’t pay, lots of which had been from nonprofit hospitals, according to a June 2022 KFF Health News article.
Important instruments for reporting on nonprofits
Reporting on nonprofit hospitals requires painstaking diligence to make sure that all details are appropriate as a result of hospital directors received’t hesitate to problem inaccuracies. Due to this fact, well being care journalists want sources to cowl this concern properly, together with the next:
- The names of nonprofit hospitals, their annual income and quantity spent on charity care (additionally referred to as well being fairness).
- An understanding of hospital funds throughout and after the pandemic.
- Good examples of how different journalists have coated these points.
Among the finest sources for the names of nonprofit hospitals is the Lown Hospital Index. Up to date in July 2023, Lown’s listing of America’s Most Socially Accountable Hospitals confirmed that amongst 3,637 hospitals, solely 54 had the very best grades on fairness, worth and outcomes. This listing is beneficial for journalists in search of hospitals with the very best grades, how pay for chief executives correlates with Lown’s social accountability rankings, and extra.
Take into account that hospitals have to codify and submit their guidelines for providing discounted or free care in monetary help insurance policies, however most states don’t specify how hospitals ought to implement these insurance policies, according to a Lown Institute report.
Since December, Lown has revealed two reviews on monetary help: “Fair Share Spending,” displaying how a lot 1,723 nonprofit hospitals give again to their communities; and “How some hospitals put up barriers to financial assistance.”
One other supply is the annual U.S. News and World Report rating displaying the very best hospitals on a number of measures, together with a well being fairness rating added final yr. The publication evaluated health equity in 4 areas:
- Racial disparities in unplanned readmissions;
- Charity care offered to uninsured sufferers;
- Neighborhood residents who obtained care;
- Preventive take care of Black residents locally.
See, for instance, how investigative reporter Molly Castle Work uncovered lawsuits filed by the Mayo Clinic in opposition to sufferers after Mayo was named the highest hospital within the nation final yr however scored poorly on well being fairness.
Understanding hospital funds
Journalists additionally want to guage hospitals’ funds each earlier than and after the pandemic, in keeping with AHCJ member Karl Stark who spoke at Well being Journalism 2023 in March. View Stark’s presentation from the convention beneath.
(Editor’s notice: The AHCJ useful resource hospitalfinances.org is being rebuilt and needs to be again on-line this fall.)
A former editor at The Philadelphia Inquirer, Stark is the director of content strategy for the Leonard Davis Institute on the College of Pennsylvania.
“When reporting on nonprofit hospital funds, first verify any lawsuits the hospital system has filed in opposition to sufferers for unpaid payments,” mentioned Stark in a phone interview. Discovering such lawsuits in opposition to sufferers could be tough as a result of hospitals usually file these claims beneath the names of third events, he added.
“You’ll be able to’t simply search for the identify of the hospital,” Stark mentioned. “As an alternative, interview legal professionals doing chapter work or those that signify folks with medical payments and who understand how hospitals are suing folks.”
Different sources for overlaying nonprofit hospitals
- In 2020, two journalists from Kaiser Well being Information (now KFF Well being Information), former senior correspondent Jay Hancock and former knowledge editor Elizabeth Lucas, had been Pulitzer Prize finalists for reporting on the predatory billing practices of the College of Virginia Well being system, a state-owned nonprofit. See this text, “UVA Health filed 36,000 lawsuits against patients,” and “Pulitzer finalists explain how to use court documents to cover hospitals’ predatory billing practices.”
- Final yr, Anna Wilde Mathews, Tom McGinty and Melanie Evans reported on this concern for The Wall Road Journal, Big Hospitals Provide Skimpy Charity Care — Despite Billions in Tax Breaks.
- Among the many greatest examples of journalists overlaying nonprofit hospitals was a collection final yr in The New York Instances titled Profits Over Patients.
- Nonprofit hospitals usually say they wrestle financially, which can be true since federal COVID-19 funding has ended and inventory market returns had been poor. On this concern, see these two articles from Well being Affairs: “What’s Behind Losses At Large Nonprofit Health Systems?” and “Nonprofit Hospitals: Profits And Cash Reserves Grow, Charity Care Does Not”.
