scholarly journals Not-for-profit hospitals’ provision of community benefit during the 2008 recession: An analysis of hospitals in Maryland

2013 ◽  
Vol 3 (3) ◽  
pp. 7
Author(s):  
Simone Rauscher Singh
Keyword(s):  
Burden Of Illness ◽  
Panel Regression ◽  
Charity Care ◽  
Community Benefit ◽  
For Profit ◽  
Community Benefits ◽  
Not For Profit ◽  
Difficult Time ◽  
Using Data ◽  
Charitable Activities

During the 2008 recession, many U.S. hospitals had to lay off staff and cut services to reduce costs, yet little is known about how these cuts affected hospitals’ provision of community benefits. While the need for charitable programs and services grew during this economically difficult time, financial pressures may have forced hospitals to cut back on their community benefit spending. Using data for not-for-profit hospitals in the state of Maryland for the years 2006 to 2010, this study explored whether, and if so how, hospitals changed their provision of community benefit during the 2008 recession. The findings showed that, on average, Maryland hospitals increased their charitable activities during the recent recession. Between 2006 and 2010, total spending on community benefits grew from an average of 5.6% to 7.7% of operating expenses with the most substantial growth in hospitals’ provision of charity care and mission-driven health services. Panel regression analysis showed that this increase in charitable activity was associated with increases in community need. Hospitals’ financial performance, on the other hand, was unrelated to their community benefit spending. These findings indicate that even in times of constrained budgets, Maryland hospitals provided substantial amounts of community benefit in response to the needs of the communities they serve. Hospital-based community benefit programs thus have the potential to play an important role in on-going community-wide efforts aimed at reducing the burden of illness and improving population health.  

Medicaid Expansion and Not-For-Profit Hospitals’ Financial Status: National and State-Level Estimates Using IRS and CMS Data, 2011-2016

2021 ◽  
pp. 107755872110097
Author(s):  
Tatiane Santos ◽  
Simone Singh ◽  
Gary J. Young
Keyword(s):  
Hospital Costs ◽  
State Level ◽  
Medicaid Expansion ◽  
Financial Status ◽  
For Profit ◽  
Not For Profit ◽  
Percentage Points ◽  
The Difference ◽  
Using Data ◽  
The Impact

Several studies have shown that Medicaid expansion has improved hospital financial performance. All of these studies have either used data from the Internal Revenue Service (IRS) or the Centers for Medicare and Medicaid Services (CMS), and none of them has examined the state-level impact of expansion on hospital finances. Using data for not-for-profit hospitals from both IRS and CMS for 2011-2016, we described the difference in costs related to uncompensated care and Medicaid shortfalls. We then estimated the impact of Medicaid expansion on hospitals’ financial status nationally and by state. Nationally, the estimated net effect of expansion reduced not-for-profit hospital costs by 2 percentage points based on IRS data and 0.83 percentage points based on CMS data. Across expansion states, the estimated net effects varied widely with approximately a 10-fold difference for hospitals based on IRS data and a 2-fold difference based on CMS data. Future studies should further explore the differences across IRS and CMS data.

scholarly journals Charity Care and Community Benefit in Non-Profit Hospitals: Definition and Requirements

2021 ◽  
Vol 58 ◽  
pp. 004695802110281
Author(s):  
Hossein Zare ◽  
Matthew Eisenberg ◽  
Gerard Anderson
Keyword(s):  
Descriptive Analysis ◽  
Charity Care ◽  
Community Benefit ◽  
Policy Makers ◽  
American Hospital ◽  
American Hospital Association ◽  
Non Profit ◽  
Gini Coefficients ◽  
Community Benefits ◽  
Total Community

Policymakers are using different ways to measure the community benefit provided by non-profit hospitals because different policy makers have different policy objectives. We compare 3 commonly used measures of community benefit; examine the correlation across the 3 measures; examine how the distribution of community benefits varies across non-profit hospitals; and compare the factors associated with the level of community benefit for each definition. The main dataset for this study is the Schedule H of IRS Form 990 data for 2017. We merged this data with the 2017 American Hospital Association (AHA), the 2017 CMS Hospital Cost Report, and the 2018 American Community Survey data. The final sample consists of 1904 non-profit hospitals. We define 3 measures of community benefit: (1) Total community benefits: combining all 17 possible measures in the 990 data; (2) Total community benefits less unreimbursed Medicaid care because it reflects a policy choice made by the state; and (3) only charity care. We also subdivided the community benefits into individual and service-based benefit. Gini Coefficients and descriptive analysis show the distribution of 3 types of community benefit measures. On average, hospitals spent 8.1% of their expenses on all community benefits; 4.3% on community benefits less unreimbursed Medicaid; and 1.7% on charity care. The provision of charity care showed more variation (Gini coefficient) than the other 2 measures. Different hospital and geographic characteristics were associated with each definition, suggesting that different types of hospitals place emphasis on different community benefits. When policy makers choose among different definitions of community benefit, they should consider what incentives they want to instill.

The Methodist Hospital System: Tax Exemption and Charitable Responsibilities of Not-for-Profit Hospitals

2001 ◽  
Vol 16 (1) ◽  
pp. 67-97 ◽  
Author(s):  
Craig E. Bain ◽  
Alan I. Blankley ◽  
Dana A. Forgione
Keyword(s):  
Financial Reporting ◽  
Attorney General ◽  
Economic Value ◽  
Poor People ◽  
Charity Care ◽  
Hospital System ◽  
For Profit ◽  
Not For Profit ◽  
The Social ◽  
Tax Exempt

In November 1990, the Texas Attorney General filed a lawsuit against The Methodist Hospital System, alleging that it had failed in its duty to provide enough charity care to poor people. The state claimed that the hospital provided significantly less charity care than the hospital reported; it then filed the suit in an effort to require specific performance—that is, to compel the hospital to provide greater amounts of charity care in the future. The case focuses on the amount of charity care provided before the suit, the economic value of the tax exemption provided to the hospital because it is a not-for-profit (NFP) hospital, and the responsibilities of the hospital given the expectations of society. The case also brings into sharp relief the value of having tax-exempt status and the social and political expectations that accompany the exemption. In addition, the case raises ethical questions concerning these issues, as well as issues involving the financial reporting of the entity and management perquisites.

State-Level Community Benefit Regulation and Nonprofit Hospitals' Provision of Community Benefits

2018 ◽  
Vol 43 (2) ◽  
pp. 229-269 ◽  
Author(s):  
Simone R. Singh ◽  
Gary J. Young ◽  
Lacey Loomer ◽  
Kristin Madison
Keyword(s):  
Community Health ◽  
State Level ◽  
Health Needs ◽  
Charity Care ◽  
Nonprofit Hospitals ◽  
Community Benefit ◽  
Minimum Income ◽  
Needs Assessments ◽  
Community Benefits ◽  
Eligibility Standards

Abstract Do nonprofit hospitals provide enough community benefits to justify their tax exemptions? States have sought to enhance nonprofit hospitals' accountability and oversight through regulation, including requirements to report community benefits, conduct community health needs assessments, provide minimum levels of community benefits, and adhere to minimum income eligibility standards for charity care. However, little research has assessed these regulations' impact on community benefits. Using 2009–11 Internal Revenue Service data on community benefit spending for more than eighteen hundred hospitals and the Hilltop Institute's data on community benefit regulation, we investigated the relationship between these four types of regulation and the level and types of hospital-provided community benefits. Our multivariate regression analyses showed that only community health needs assessments were consistently associated with greater community benefit spending. The results for reporting and minimum spending requirements were mixed, while minimum income eligibility standards for charity care were unrelated to community benefit spending. State adoption of multiple types of regulation was consistently associated with higher levels of hospital-provided community benefits, possibly because regulatory intensity conveys a strong signal to the hospital community that more spending is expected. This study can inform efforts to design regulations that will encourage hospitals to provide community benefits consistent with policy makers' goals.

Generalized Exchange and Public Policy: An Illustration of Support for Public Schools

1998 ◽  
Vol 17 (2) ◽  
pp. 274-286 ◽  
Author(s):  
Kimball P. Marshall
Keyword(s):  
Public Policy ◽  
Public Schools ◽  
Social Responsibility ◽  
Organization Performance ◽  
Exchange System ◽  
For Profit ◽  
Community Benefits ◽  
Not For Profit ◽  
Generalized Exchange ◽  
School Tax

Generalized exchange, or indirect transfers in a univocal exchange system, is not researched widely but is common in situations involving public policies and not-for-profit organizations. Using survey data on support for a school tax, the author assesses the influences of perceptions of community benefits, organization performance, and social responsibility. The results partially support the utility of distinguishing between generalized and restricted exchange situations.

Measuring Community Benefits Provided by Nonprofit and For-Profit HMOs

2003 ◽  
Vol 40 (2) ◽  
pp. 114-132 ◽  
Author(s):  
Mark Schlesinger ◽  
Shannon Mitchell ◽  
Bradford Gray
Keyword(s):  
Local Population ◽  
Health Maintenance Organizations ◽  
Future Research ◽  
Community Benefit ◽  
Health Maintenance ◽  
For Profit ◽  
Community Benefits ◽  
Comprehensive Comparison ◽  
Nationally Representative ◽  
Dramatic Shift

Despite the dramatic shift from nonprofit to for-profit ownership in the managed care industry, little is known about the implications for health plans' relations with the communities in which they operate. This paper provides the first comprehensive comparison of the community benefit activities of nonprofit and for-profit health maintenance organizations (HMOs). We develop a conceptual framework for identifying these activities and provide evidence from a nationally representative survey of plans fielded in 1999. We find that nonprofit plans exceed their for-profit counterparts on some, but not all, aspects of community benefit activity. The most consistent ownership-related differences involve redistributive programs (subsidized services and general philanthropy), commitments to medical research, and services that benefit the entire local population, beyond the plan's enrollees. Other forms of community benefits show mixed or modest differences between nonprofit and for-profit plans. Unexpectedly, for-profit plans actually appear more active in helping consumers deal with information asymmetries. The paper concludes with a discussion of implications for policy and future research.

scholarly journals A multilevel mixed-effects regression analysis of the association between hospital, community and state regulatory factors, and family income eligibility limits for free and discounted care among U.S. not-for-profit, 501(c)(3), hospitals, 2010 to 2017

2021 ◽  
Vol 21 (1) ◽  
Author(s):  
Jason N. Mose
Keyword(s):  
Low Income ◽  
Family Income ◽  
Safety Net ◽  
Mixed Effects ◽  
Poverty Level ◽  
Community Factors ◽  
Regulatory Factors ◽  
For Profit ◽  
Community Benefits ◽  
Not For Profit

Abstract Background Not-for-profit hospitals are facing an uncertain financial future, especially following the COVID-19 pandemic. Nevertheless, they are legally obligated to provide free and discounted health care services to communities. This study investigates the hospital, community, and state regulatory factors and whether these factors are associated with family income eligibility levels for free and discounted care. Methods Data were sourced from Internal Revenue Service Form 990, several data files from the Centers for Medicare and Medicaid, demographic and community factors from the Census Bureau, supplemental files from The Hilltop Institute, Community Benefit Insight, and Kaiser Family Foundation. The study employs multilevel mixed-effects linear and ordered logit regressions to estimate the association between the hospital, community, state policies, and the hospital’s family income eligibility limit for free and discounted care. Results A plurality of hospitals (49.96%) offered a medium level of family income eligibility limit (160–200% of the federal poverty level (FPL)) for free care. In comparison, about 53% (52.94%) offered a low level (0–300 of FPL) eligibility limit for discounted care. Holding all else equal, hospitals designated as critical access, safety net, those in rural areas or located in disadvantaged areas were associated with an increased probability of offering low eligibility limits for free and discounted care. Hospitals in a joint venture, located in highly concentrated markets or states with minimum community benefits requirements, were associated with an increased probability of offering high eligibility limits. Conclusion State and community factors appear to be associated with the eligibility level for free and discounted care. Hospitals serving low-income or rural communities seem to offer the least relief. The federal and state policymakers might need to consider relief to these hospitals with a requirement for them to provide a specific set of minimum community benefits.

scholarly journals Strategic reporting by nonprofit hospitals: an examination of bad debt and charity care

2021 ◽  
Author(s):  
Amanda Beck ◽  
Collin Gilstrap ◽  
Jordan Rippy ◽  
Brian Vansant
Keyword(s):  
Cost Of Debt ◽  
Charity Care ◽  
Nonprofit Hospitals ◽  
Social Good ◽  
Hospital Managers ◽  
Community Benefits ◽  
Stakeholder Pressure ◽  
Tax Exempt ◽  
Using Data ◽  
Bad Debt

AbstractIn this paper, we examine bad debt and charity care reporting by nonprofit hospitals around bond issuance. Given the tax advantages afforded to nonprofit hospitals, including the ability to issue tax-exempt debt, hospital managers encounter stakeholder pressure to provide community benefits. When nonprofits issue debt, they also face economic pressure to meet creditors’ financial performance expectations. We document a reporting strategy that allows nonprofit hospitals to reduce the cost of bond debt while simultaneously alleviating regulators’ and community members’ concerns about inadequate provision of charity care. Using data from public bond issues for California nonprofit hospitals, we find that hospital managers shift costs from bad debt expense to charity care in periods prior to a public bond issuance and that the strategy is associated with a lower cost of debt. Our results inform those relying on accounting measurements to infer nonprofit hospitals’ social good provisions and financial health.

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