The American Hospital Association is defending the community dedication of hospitals and health systems after the Lown Institute, a nonpartisan healthcare think tank, released a report that found charity care from 80% of nonprofit hospitals falls behind tax breaks.
The "fair share spending" report was based on 2021 IRS data from 2,425 nonprofit hospitals in the U.S. and included more than 650 additional hospitals compared to last year. It also shared hospitals that spent the most on community investment, exceeding their tax exemption value.
AHA President and CEO Rick Pollack argued in a March 25 statement on the organization's website that hospitals and health systems have shown unwavering dedication to their patients and communities during significant challenges over the last few years. He called out the Lown report findings as suffering from the "same biases, flaws and shortcomings as its previous reports."
"The report cherry-picks categories of community benefit and ignores other areas of great importance by omitting the very real underpayments from Medicaid and Medicare that hospitals must absorb," Mr. Pollack said.
Mr. Pollack suggested the report oversimplified complicated policy, payment and demographic realities that hospitals face, making it seem as if they have a choice to provide financial assistance while not suffering from Medicaid shortcomings.
The report should also be viewed with a "heavy dose of speculation" given that the data is from 2021, a time when hospitals were in the throes of the COVID-19 pandemic.
"The government stepped up to provide desperately needed temporary support in the form of relief payments and coverage expansions," Mr. Pollack said. "And by 2022, hospitals faced a new set of challenges, like skyrocketing expenses, many of which persist today."
Lastly, the report's suggested "one size fits all" financial assistance requirements do not take into account the year to year changes that can happen in hospital finance, such as the Change Healthcare cyberattack, and could have serious effects on hospital finances and their communities, Mr. Pollack claimed.
Mr. Pollack said the AHA welcomes a "good-faith" discussion on the benefits hospitals bring to their communities.