| Description |
Controversy over the tax-exemption of nonprofit hospitals has been repeatedly discussed over the past decade. Many question whether the exemption is justified by hospitals' benefit to communities (Al-Agba, 2017). Past studies have analyzed this issue by focusing on charitable care, or uncompensated care, as a measure of community benefit (Bai, et al., 2021; Bruch and Bellamy, 2020). Most findings conclude that nonprofit hospitals do not provide enough charity care to justify the tax-exemption. In this paper, I instead focus on other metrics of a hospital's benefit to its community, aside from charity care. These metrics include the populations a hospital serves, the quality outcomes of the hospital, and the impact of the hospital's efforts detailed in its Community Health Needs Assessment. The results indicate that, for most metrics analyzed, nonprofit hospitals do not provide a significantly greater community benefit than forprofit hospitals. Nonprofit hospitals serve higher-income populations and do not serve more racially diverse counties, nor counties with lower rates of insurance. Additionally, nonprofit hospitals do not necessarily take on a greater portion of their revenue from Medicaid and Medicare patients. My analysis found no clear impact of hospital's efforts to resolve certain community issues such as substance abuse. However, these hospitals have more positive quality outcomes in terms of readmission rates. These findings help answer the question of if nonprofit hospitals benefit their communities to a greater extent than their for-profit counterparts. |
