Analysis Fails to Recognize Charity Care is Only Part of a Hospital’s Total Community Benefit

The mission of all hospitals and health systems, regardless of size and type of ownership, is to care for their communities and patients. In fact, an Ernst and Young report from 2017 demonstrates that for every dollar invested in non-profit hospitals and health systems through the federal tax exemption, $11 in benefits is delivered back to communities.

The authors of the new Health Affairs analysis fail to recognize that charity care is only one part of a hospital’s total community benefit. Looking only at charity care does not account for the numerous programs and services that hospitals provide to meet the varied needs of their community, such as help accessing healthy food, educational programs and health screenings, transportation to ensure patients arrive at needed medical appointments, and assistance with housing and other efforts to address the social determinants of health, among many others.

Hospitals not only provide financial assistance to those unable to pay for their own care, but absorb underpayments from means-tested government programs such as Medicaid. In addition, hospitals also provide benefits by bearing unreimbursed Medicare expenses and bad debt expenses attributable to patients who would have qualified for financial assistance but did not apply. Hospitals also subsidize the high cost of the essential services they provide, such as burn and neonatal units. 

In all, hospitals and health systems do more than any other part of the health care field to support vulnerable patients and communities: Our doors are always open, 24/7, regardless of a patient’s ability to pay. In fact, since 2000, hospitals and health systems have provided more than $620 billion in care for which no payment was received for patients in need.

Melinda Hatton is AHA's general counsel.