PRESS RELEASE: Most U.S. nonprofit hospitals neglect community investment obligation, analysis reveals
Seventy-two percent of hospitals fail to follow through on expected charity commitments. The result: $17 billion in unrealized community investment.
NEEDHAM, Mass. — Though all nonprofit hospitals enjoy big tax breaks, many fail to make commensurate investments in community health, according to a new analysis from the Lown Institute, a health care think tank. The Institute today released Community Benefit findings from its 2021 Hospitals Index, that show nonprofit hospitals collectively failed to invest nearly $17 billion in their communities.
The Lown Hospitals Index 2021 Community Benefit ranking examined 3,641 hospitals based on their Medicaid revenue, charity care spending, and other investments that have direct benefit to the community–like health clinics, housing, and food security. Data sources include hospital cost reports filed with the Centers for Medicare and Medicaid Services and IRS 990 forms, both from 2018.
Top ten hospitals, community benefit
The following hospitals performed the best overall in community health investment:
- Paradise Valley Hospital (National City, CA)
- Elmhurst Hospital Center (Elmhurst, NY)
- Queens Hospital Center (Jamaica, NY)
- Metropolitan Hospital Center (New York, NY)
- Woodhull Medical and Mental Health Center (Brooklyn, NY)
- Leonard D. Chabert Medical Center (Houma, LA)
- NYC Health + Hospitals Coney Island (Brooklyn, NY)
- Lallie Kemp Medical Center (Independence, LA)
- Zuckerberg San Francisco General Hospital (San Francisco, CA)
- The University Hospital (Newark, NJ)
Not surprisingly, public hospitals are well represented on the list, given their role as safety net institutions tasked with caring for all regardless of ability to pay. New York City, which has a robust public hospital system, stands out at the top.
“Hospitals say they want to be great community partners, and the ones at the top of our list have followed through,” said Dr. Vikas Saini, president of the Lown Institute. “With the pandemic shining a light on health inequity in America, we need more hospitals to give back as much as they take in tax breaks.”
Many nonprofits not spending their fair share
For the first time, the Institute calculated “fair share deficits” for private nonprofit hospitals, by comparing each hospital’s spending to the value of its tax exemption. Of the 2,391 hospitals included in this part of the study, 72 percent were found to have a fair share deficit, ranging from a few thousand dollars to $261 million. Hospitals that dedicated at least 5.9 percent of overall expenditures to charity care and meaningful community investment were considered to have spent their fair share. The 5.9 percent threshold is based on established research into the valuation of the nonprofit tax exemption.
Hospitals with the largest fair share deficits
With the exception of Vanderbilt University Medical Center, the ten hospitals with the largest fair share deficits all appear on US News & World Report’s 2020-2021 Honor Roll. These hospitals account for more than ten percent ($1.8 billion) of the nation’s total fair share deficit:
| NAME | CITY | FAIR SHARE DEFICIT |
|---|---|---|
| Cleveland Clinic | Cleveland | -$261 M |
| New York-Presbyterian Hospital | New York | -$237 M |
| UCSF Medical Center | San Francisco | -$208 M |
| Massachusetts General Hospital | Boston | -$179 M |
| University of Michigan Health System | Ann Arbor | -$169 M |
| New York University Langone Medical Center | New York | -$163M |
| Vanderbilt University Medical Center | Nashville | -$157 M |
| Brigham and Women’s Hospital | Boston | -$142 M |
| Hospital of the University of Pennsylvania | Philadelphia | -$142 M |
| Cedars-Sinai Medical Center | Los Angeles | -$138 M |
Performance varied widely–even among hospitals in the same city, where hospitals face similar tax rates and their communities have similar needs and similar rates of uninsurance. In Boston, for example, Boston Medical Center had a fair share surplus of $11 million. Massachusetts General Hospital, by contrast, had a community benefit spending deficit of $179 million.
Additional information, including an explanation of methods, is available at the Lown Institute Hospitals Index website. A launch of the full 2021 Lown Institute Hospitals Index, including rankings across more than 50 metrics, will take place in the early fall.
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ABOUT THE LOWN INSTITUTE: Founded in 1973 by Nobel Peace Prize winner Bernard Lown, MD, developer of the defibrillator and cardioverter, the Lown Institute believes that a radically better system of health is possible and generates bold ideas towards that goal. The Lown Hospitals Index, a signature project of the Institute, is the first ranking to assess the social responsibility of U.S. hospitals by applying measures never used before like racial inclusivity, avoidance of overuse, and pay equity.
CONTACT
Tiffanie Thomas, tthomas@messagepartnerspr.com or (703) 400-0459
Aaron Toleos, VP Communications, atoleos@lowninstitute.org or (978) 821-4620