Hospitals are Community Cornerstones and Advance Health in Many Ways

Every hospital and health system in America is a foundation of its community. They not only provide continuous care and service to patients as well as essential commodities throughout a day but they also offer a wide array of core health, social and other services that propel development of ministries of health as well as welfare of patients and communities.

Non-profit health systems have special responsibilities to their constituencies in return for the privileges of being tax-exempt entities. These hospitals submit forms on the amounts they incur to provide community benefits annually, and they jointly with their community undertake a comprehensive assessment of community health needs at least every three years.

A new study for AHA by the international accounting firm EY (Ernst and Young) shows that nonprofit hospitals are fulfilling — and often surpassing — the demands and obligations that accompany tax-exempt status. 

The EY study demonstrates how tax-exempt hospitals and health systems gave back $10 in community benefits for every $1 in federal tax exemption in 2020, the latest year for which data is available. This is up from $9 in benefits the prior year while working on the front lines of a once in a century pandemic.

Taken separately, summing up, the forgone federal tax revenues as a result of tax-exempt nonprofit hospitals in the fiscal year of 2020 were estimated at $13.2 billion. Nonetheless, reporting the impact that tax-exempt hospitals brought to the communities on the Form 990 Schedule H revealed that such a loss of tax revenue equals to $ 1.3 billion, however, the worth of the services that the hospitals delivered to their communities was nearly tenfold and amounted to $ 12.9 billion. That by anyone’s measurement is a huge return on investment and certainly suggests that there is value to be found in the U.S. market for companies willing to look for it.

those benefits come in many forms that often enhance the welfare and wellbeing of people and their households and neighbourhoods.

For instance, $57 billion was related to charity care for patients, cost of Medicaid that is not compensated, and other services that are provided free-of-charge to patients, pursuant to means-tests policy of the federal government as a part of its budget.

Other benefits include: Programs & services such as: Maternal & Child care programs Safety Together, emergency community assistance Delivery of focused health initiatives and services.These are assistance in obtaining housing, procuring nutritious food, offering educational sessions and health checkups, transportation to necessary medical appointments, vaccination and other programs meant to meet the needs that impact the health of their community.h and well-being of individuals and communities.

Nonprofit hospitals have special obligations to their communities in exchange for being tax-exempt. These hospitals report the amounts they spend on community benefits yearly and conduct a community health needs assessment in conjunction with their community at least every three years.

According to a new analysis for the AHA by the international accounting firm EY (also known as Ernst and Young), nonprofit hospitals and health systems are meeting — and exceeding — the requirements and expectations that are attached to the privilege of tax exemption. 

The EY study shows that tax-exempt hospitals and health systems delivered $10 in benefits to their communities for every dollar’s worth of federal tax exemption in 2020, the most recent year for which comprehensive data is available. This represents an increase from $9 in benefits the prior year despite serving on the front lines of a once-in-a-century pandemic.

Breaking it down, in 2020, the estimated federal tax revenue forgone due to the tax-exempt status of nonprofit hospitals was $13.2 billion. However, the benefit that tax-exempt hospitals provided to their communities, as reported on the Form 990 Schedule H, was estimated to be $129 billion, almost 10 times greater than the value of tax revenue forgone. That’s a tremendous return on investment by any standard.

Those benefits take many forms that improve the lives and health of individuals, families and communities.

For example, $57 billion was for financial assistance for patients in need, including charity care, unreimbursed Medicaid, and other unreimbursed costs from means-tested government programs.

Other benefits include a range of programs and services designed to meet the health needs of their communities. These  include help with housing, accessing healthy food, providing educational programs and health screenings, transportation to needed medical appointments, vaccination clinics and other programs to address the needs that affect their community’s health and well-being.

Furthermore, hospitals and health systems contribute to disaster planning concerning all kinds of emergencies, contribute to education and training of the subsequent generations of medical staff, and contribute to the enhancement of technologies and medical tools to guarantee the availability of the highest quality healthcare services.

As a component of AHA’s Telling the Hospital Story initiatives, we remain to showcase the great work of all hospitals and health systems across America. From here you can find out more about some of the inspiring stories and new and exciting programmes and partnerships which are changing people’s lives.

Improving health of patients and the populations served will remain the primary focus in the way all hospitals and health systems operate. They speak it every day profoundly in many ways.