Changes in Community Benefit spending by non-profit hospitals, 2009-2012: Implications for Public Health

The trend towards higher level of health insurance in the United States holds the potential to dramatically change charity care spending from the nation’s 2,500 non-profit hospital systems. This presentation will describe shifts in payment for charity care between 2009 and 2012, as well as changes in other activities not-for-profit hospitals and hospital systems perform as part of their Community Benefit requirements. Community Benefit requirements have been outlined by the IRS as specific charitable activities hospitals perform that help to justify their not-for-profit tax status.

Approximately 2,500 systems submitted data in 2009-2012. Not-for-profit hospitals reported spending over $50 billion each year on community benefits, largely in charity care and other financial assistance. Hospitals spent 7.7% of total operating expenses on community benefit in 2009 on average, 70% of which went to charity care and other financial assistance in some form.  The average total spending on community benefits increased to 8.5% in 2012. This correlates to over $30 billion in charity care and related financial assistance spending, nationally. In total, hospitals spent about 0.11% of total operating expenses on population-oriented community building activities, e.g., economic development, community health improvement activities, or leadership training. Data will also  be presented on local-level Community Benefit spending.  These data help to further establish a baseline of health care spending in advance of most major provisions of the ACA’s implementation in 2013 and 2014. With shifts in the number of uninsured, the need for charity care spending may diminish, and hospitals may elect to shift more toward other community-building activities.