Source: Melanie Evans, Modern Healthcare, Vol. 43 no. 7, February 16, 2013
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Despite disparity in margins, rich and poor hospitals offer similar levels of subsidized care… Both [ Memorial Medical Center, TX and St. John's Medical Center, OK] are among the roughly 60% of private U.S. hospitals that receive local, state and federal tax breaks in exchange for operations that benefit the community….
…Modern Healthcare found no correlation between margins and spending on free care in an analysis of roughly 2,500 tax records for organizations that operate tax-exempt hospitals. The results suggest that profits do not determine what hospitals spend on free and discounted care and other subsidized services to benefit the community, experts said. … Capital plans that prompt hospitals to seek to build reserves to invest may also influence what hospitals spend on community benefits, he said. …
…The same held true in an analysis of spending on a broader group of hospital activities the Internal Revenue Service counts as “community benefits,” such as community health services, donations, medical education and research. Data analyzed by Modern Healthcare, provided by the not-for-profit charity watchdog GuideStar, includes 2009 and 2010 figures reported under new disclosure rules intended to yield a clearer accounting of the public benefits that tax-exempt hospitals provide. …
…Hospitals are not held to any federal threshold for spending on community benefits or charity care, and until recently, were not required to report such data. Tax-exempt hospitals have operated for decades with only loose standards and limited or voluntary public accounting for how they earn those tax breaks. …
