MOST NON-PROFIT HOSPITALS NEGLECT COMMUNITY INVESTMENT DUTY, ANALYSIS REVEALS

72% fail to follow through on expected charitable commitments, resulting in $17 billion in unrealized community investment, according to a new study.

Cleveland Clinic, Massachusetts General, Vanderbilt University Medical Center and several other top not-for-profit providers are getting deep tax breaks but failing to invest in community health, according to new research from the Lown Institute, a group of reflection on health care.

Nonprofit hospitals have collectively failed to invest nearly $17 billion in their communities, according to analysis released today from the Lown Institute’s 2021 Hospital Index.

The Lown Hospital Index 2021 community benefits ranking examined 3,641 hospitals based on their Medicaid revenue, charitable care spending, and other investments that directly benefit the community – health clinics, housing and security food. Data sources include hospital cost reports filed with the Centers for Medicare and Medicaid Services and IRS Forms 990, both from 2018.

The institute, for the first time, has calculated the “fair share of 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% had a fair deficit, ranging from a few thousand dollars to $261 million.

Hospitals that spent at least 5.9% of their overall spending on charitable care and meaningful community investments were considered to have spent their fair share. The 5.9% threshold is based on established research on assessing the tax exemption of non-profit organizations.

Largest fair share deficits

With the exception of Vanderbilt University Medical Center, the 10 hospitals with the largest fair deficits all appear on US News and World Reports Honor Roll 2020-2021. These hospitals account for more than 10% ($1.8 billion) of the country’s total fair share deficit:

NAME

FAIR SHARE OF THE DEFICIT

Cleveland Clinic (Cleveland)

-$261M

New York Presbyterian Hospital (New York)

-$237m

UCSF Medical Center (San Francisco)

-$208m

Massachusetts General Hospital (Boston)

-$179m

University of Michigan Health System (Ann Arbor)

-$169m

NYU Langone Medical Center (New York)

-$163M

Vanderbilt University Medical Center (Nashville)

-$157M

Brigham and Women’s Hospital (Boston)

-$142M

University of Pennsylvania Hospital (Philadelphia)

-$142M

Cedars-Sinai Medical Center (Los Angeles)

-$138M

Performance varies widely even among hospitals in the same city, where hospitals face similar tax rates and their communities have similar needs and similar uninsured rates, the study found. In Boston, for example, the Boston Medical Center had a fair surplus of $11 million. Massachusetts General Hospital (MGH), on the other hand, had a spending shortfall of $179 million for community benefits.

“The MGH has a long-standing commitment to meeting the needs of our diverse communities, improving the health and well-being of those we serve, and working within the community to address the social determinants of health” , according to a statement from Joseph Betancourt, MD, MPH, Senior Vice President for Equity and Community Health at the MGH.

Over the past decade, MGH has earned major national recognition from the American Hospital Association and the Association of American Medical Colleges for its work and contributions to community health and equity. health,” he said. “The MGH has yet to see the Institute’s most recent report, but when it becomes available, we will review the methodology and results to determine how the rankings were compiled.”

Health Leaders contacted all hospitals on the shortfall list. Here are the statements, edited for length, of those who responded:

University of Michigan Health System

“The University of Michigan Health has a strong tradition of supporting and delivering programs directly in our communities. Michigan’s expansion of Medicaid and other programs under the Affordable Care Act has allowed us to accelerate our efforts to get more patients covered for their health care, which has led to better access to health care for the most vulnerable Michiganders and a reduction in our charitable care spending.

“Many of our community investments to increase health equity, such as school health centers (safety net clinics) and services for the elderly, are not reflected in this methodology.”

Vanderbilt University Medical Center

“For the most recent fiscal year, Vanderbilt University Medical Center provided more than $829 million in charitable care and other community benefits to serve the citizens of Tennessee. These funds support direct patient care and a range of initiatives that positively impact Tennesseans in other ways through improved community health. »

“This organization’s analysis only allows for some financial metrics to be accounted for while intentionally excluding other beneficial activities traditionally supported by academic medical centers like VUMC that require significant financial commitment.”

Brigham and Women’s Hospital

“Brigham and Women’s Hospital is committed to the surrounding communities and invests in the people, neighborhoods and businesses within them. A core part of our mission, this commitment is reflected in many of our Center for Community Health initiatives and health equity that are informed by an extensive process of assessing community health assets and needs.”

“These include grants to local nonprofits, prevention and wellness activities that address social factors that contribute to poor health outcomes, programs to reduce violence and improve birth outcomes, support young parents and their families, and advance education, employment and career development opportunities for young people.”

Cleveland Clinic

“The Cleveland Clinic remains committed to the communities we serve. In 2019, our total community benefit increased 12% to $1.16 billion, the highest level in our reporting history. Community benefit is a measure of a hospital’s investment in its community through education, research, Medicaid financial assistance and deficit, subsidized services, and outreach programs. . »

“As a 100-year-old nonprofit hospital system, The Cleveland Clinic is a community asset with no owners, investors, or shareholders. All incremental funds from operations are reinvested into the health system to support patient care, research, education, and longstanding charitable efforts.”

Cedars-Sinai Medical Center

“The study ignores many of the most important community contributions of independent, nonprofit academic medical centers and does not accurately reflect how we serve our communities. For example, the study excludes all financial contributions from medical centers academics to research and education. The conclusion that “these investments have no direct impact on the health of his community” would come as a big surprise to the millions of people in underserved communities and communities of all types across the country and the world whose lives have been saved or improved because of research funded by academic medical centers.”

“It also fails to take into account the impact that the educational mission of academic medical centers has on the chronic shortage of medical professionals. Moreover, it fails to consider the fact that Medicaid and Medicare only cover a fraction of the actual cost of an academic medical center When these community benefit contributions are appropriately included, Cedars-Sinai’s total community benefit contribution for fiscal year 2020 was $723,512,000 (18% of total expenses ).

Best performers

The 10 hospitals that achieved the best overall results in investing in community health were:

  1. Paradise Valley Hospital (National City, CA)
  2. Elmhurst Hospital Center (Elmhurst, New York)
  3. Queens Hospital Center (Jamaica, New York)
  4. Metropolitan Hospital Center (New York, New York)
  5. Woodhull Medical and Mental Health Center (Brooklyn, New York)
  6. Leonard D. Chabert Medical Center (Houma, Louisiana)
  7. NYC Health + Coney Island Hospitals (Brooklyn, New York)
  8. Lallie Kemp Medical Center (Independence, Louisiana)
  9. Zuckerberg San Francisco General Hospital (San Francisco, CA)
  10. University Hospital (Newark, New Jersey)

“Hospitals say they want to be great community partners, and those at the top of our list have followed suit,” said Dr. Vikas Saini, president of the Lown Institute. “With the pandemic shining a light on America’s health inequities, we need more hospitals to give back as much as they take in tax breaks.”

Additional information, including an explanation of the methods, is available on the Lown Institute Hospital Index website. A launch of the Lown Institute’s comprehensive 2021 Hospital Index, including rankings on more than 50 metrics, will take place in early fall.

Carol Davis is the Nursing Editor at HealthLeaders, an HCPro brand.

Jill E. Washington