Hospitals' community benefit in the context of the larger public health system

Achieving meaningful population health improvements has become a priority for many healthcare and public health organizations, yet funding to sustain multi-sector initiatives is frequently not available. One potential source of funding for population health initiatives is the community benefit expenditures that are required of nonprofit hospitals to maintain their tax-exempt status. In this paper, we used data from nonprofit hospitals’ tax filings (IRS Form 990 Schedule H) combined with expenditure information for state and local health departments to explore the importance of hospitals’ community benefit dollars as a funding source for population health. We found that across all 50 states nonprofit hospitals spent an average of $133 per capita on community benefit activities, of which $13 went toward community health initiatives (CHI). State and local health department spent an average of $110 and $50 per capita, respectively. Hospitals’ spending on CHI thus contributed an additional eight percent to the financial resources available for public health activities, with further increases expected as health reform takes full effect. CHI spending, however, varied widely among hospitals and, based on our analyses, was unrelated to state and local health department spending Adding CHI dollars to the financial resources available to public health agencies, however, reduced existing inequalities in governmental public health spending across states as shown by a drop in the Gini coefficient from 0.36 for CHI spending alone to 0.21 for CHI and governmental public health spending combined. Hospitals’ CHI dollars thus play an important role in funding the larger public health system.