LISTEN: What should we expect from tax-exempt hospitals?

Earlier this month, Lown experts Dr. Vikas Saini and Judith Garber were featured on the Relentless Health Value podcast to talk about financial assistance, fair share spending, and why America needs a socially responsible healthcare system.

“If hospitals have to base their decisions on revenue rather than population health needs, then these are the results we get.”

– Dr. Vikas Saini, President of the Lown Institute

Nonprofit hospitals are exempt from most taxes, and in exchange are required to report their spending on financial assistance and other community investments. But how much do hospitals actually give back, and which ones give back the most? It’s not necessarily the ones you might think, Saini and Garber explain.   

“It’s often the hospitals with the least financial resources that are providing the most in terms of fair share spending,” said Garber. That’s partly because hospitals that are wealthy get that way by targeting privately insured patients, rather than patients with public insurance or no insurance. “These outcomes are the outcomes of the system as it was designed. Different people and different procedures have different dollar values,” said Saini.  

According to Lown Institute research, many of the largest hospital systems with plentiful financial resources fail to give back their fair share, leaving hundreds of millions in potential community investment unspent.  

Our experts offer 3 suggestions on how to remedy this:

1. Reporting needs to be useful. Right now, the IRS has so many categories and it’s difficult to track how spending corresponds with community health needs. To fix the system, we need to be able to understand what spending is already happening–or not.
2. States should step up and legislate community benefit spending. Oregon, for example, recently established a minimum level of spending and is calculating thresholds for each hospital. 
3. Return power to the community. All of this spending information should be aggregated and compared with the results of frequent community health needs assessments. There could be a separate entity of community members overseeing and ensuring that spending matches the needs of the community.

Listen to the entire podcast at Relentless Health Value.