What Tax-Exempt Hospitals Owe Their Communities

[xchrom]

http://www.bloomberg.com/news/2013-04-24/what-tax-exempt-hospitals-owe-their-communities.html

Consider the tax-exempt hospital.

Traditionally, these hospitals have offered free or subsidized medical treatment for poor patients. Over the past half-century, however, as the federal government has taken to paying for health care -- via Medicare, Medicaid and, now, the Affordable Care Act -- policy makers have tried to steer the nation’s 2,900 tax-exempt hospitals away from charity medical treatment for individuals and toward the kinds of preventive public-health services that are believed to lower health-care costs generally: community blood-pressure and mammography screening, clinics for weight loss and smoking cessation, and so on.

To push this shift, the Internal Revenue Service has required tax-exempt hospitals to report annually on the community benefits they provide. Now, under the Affordable Care Act, they also have to formally assess, every three years, the health needs of their communities and adopt strategies to meet those needs. The idea is to hold the hospitals accountable for the estimated $13 billion in federal, state and local tax breaks they receive.

It’s too soon to tell whether the latest reporting requirement will accomplish the shift policy makers are looking for. What is known is that hospitals have a long way to go to live up to their mandate.

According to a study published last week in the New England Journal of Medicine, only 5 percent of the money that tax-exempt hospitals spent on behalf of their communities in fiscal year 2009 went to public-health programs. The lion’s share went to free and subsidized patient care.