Nonprofit hospitals comprise a majority of the hospitals in the United States. These hospitals receive tax breaks and tax-free benefits at the expense of taxpayers, and in return, nonprofit hospitals are expected to provide charity care to help their communities. But the truth is most nonprofit hospitals do not provide enough charity care to receive these benefits.
It’s not because of a lack of money. Nonprofit hospitals receive many benefits from the federal government, including significant tax breaks, tax-free contributions, and tax-free bonds for capital projects – benefits paid for by you and me, the taxpayers.
According to Johns Hopkins University Professor Gerard Anderson, the value of nonprofit hospital subsidies from avoiding taxes is over $60 billion annually—yes, you read that right—$60 billion.
The recent Wall Street Journal analysis confirmed what we saw earlier this year in a report by the N.C. State Health Plan and Johns Hopkins Bloomberg School of Public Health. That report found that charity care defined as free or discounted care provided to low-income patients didn’t surpass 60% of the tax exemption’s estimated value across most of our state’s largest health systems.
Report after report confirms: that despite making up the majority of hospitals in the United States and receiving significant tax breaks, nonprofit hospitals have underperformed in providing charity care to their patients, especially compared to their for-profit competitors.
According to the same Wall Street Journal article, just last year, HCA, the largest for-profit health organization in the United States, provided $3.3 billion worth
Because nonprofit hospitals misuse their tax benefits and are not held accountable, they are left to profit much more than for-profit health care systems. Nonprofit hospitals make millions – if not billions – of dollars annually with no accountability to ensure their profits go towards providing charity care to their patients. When asked about low charity care numbers, nonprofit hospitals blame the Affordable Care Act and expanding Medicaid programs, saying it reduces the number of people needing free care, but statistics show otherwise.
Nonprofit hospitals often get a free pass because their name implies altruism, but they share a fair amount of blame for high health care costs. This is neither fair nor ethical.
If for-profit hospitals can provide more charity care than nonprofit hospitals, what are we still giving nonprofit hospitals tax breaks? It’s time we point the blame for high health care costs in the right direction – at nonprofit hospitals. The federal government must seriously reevaluate its alliance with nonprofit hospitals that have done nothing but run up costs for patients while profiting over tax breaks and benefits.
The time to act is now; otherwise
Rayne Brown is a former representative of North Carolina House District 81 from 2011 to 2016.