CHA News Article

Report Indicates Hospitals Spend Average 12.3 Percent of Expenses on Community Benefits

According to a new analysis commissioned by the American Hospital Association (AHA), nonprofit hospitals spent an average 12.3 percent of their total expenses on benefits to their communities in 2011, an increase from 11.5 percent in 2010. Additionally, direct benefits to patients, which include charity care, financial assistance and spending to fill gaps in Medicaid underpayments, averaged 6.1 percent of total expenses in 2011, an increase over that reported in 2010. Benefits to the community include charity care, Medicaid underpayments, community health improvement programs, health research and education, subsidized services, bad debt expense attribution to charity care, Medicare shortfall, and other community benefits and building activities. The report acknowledges these financial costs incurred by hospitals do not include all the tangible and intangible benefits of improving their communities’ health and well-being.

AHA worked with Ernst & Young to collect and analyze the data from 587 Schedule Hs to better understand the diverse ways hospitals serve their communities. The results are based on information from hospital and health care systems and single hospitals of varying size for the most recent tax year for which data are available. The report is available at http://blog.aha.org/post/why-should-you-care-about-schedule-h.

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