Why not provide charitable care? | City Journal


With healthcare prices And Medical debt It is not surprising to see headlines calling for an expansion of government Medicaid programs To help the poorest patients. Another method existed, however, that would cover lower-income patients, avoiding Medicaid Poor health resultsand the cost to taxpayers is much lower.

Although few may be aware of it, nonprofit hospitals offer a private safety net that Americans can now sign up for. It’s called charitable care — and nonprofit hospitals should take it more seriously. If the government could give hospitals clearer guidelines, Americans could benefit from lower taxes, while fewer low-income patients would be sent to debt collectors.

tax authority Section 501(r) It requires all nonprofit hospitals exempt from federal and state taxes to establish a “financial assistance policy”—that is, to establish charitable programs that provide free or reduced care to low-income patients. Considering that 76 percent From America’s Community Hospitals nonprofit, philanthropic care should be within the reach of many Americans. one study I even found that one in three hospitals offer comprehensive charitable care to patients who make less than 200 percent of the federal poverty level—if that’s an industry standard everywhere, almost 90 million Americans May be eligible for charitable care.

But modern Evidence He points out that few Americans take advantage of this option. Many revenue-rich nonprofit hospitals do not provide enough charitable care to compensate $24 billion in tax breaks They get – in fact, they offer less than their for-profit counterparts. In 2019, hospitals reported spending $28 billion covers care without compensation, which sounds pretty impressive until you consider that the US spends $4 trillion annually on health care, so $28 billion is only 0.7 percent of all spending. The Kaiser Family Foundation found that in half of all reported hospitals, only charitable care accounted for 1.4 percent or less of operating expenses. This suggests that many hospitals could spend a lot more on charitable care, and that many eligible patients are not aware of the programmes.

Douglas Alden, counselor and attorney who works with organizations that help patients Charity applicationsWhen reviewing the percentages of nonprofit hospitals’ charitable care relative to total revenue, it is not uncommon to see less than 3% of their total revenue allocated to charitable care.

What can be done to increase the benefit of charitable care? Most condition Governments have vague guidelines for charitable care, but few have effective ways of reviewing, updating or evaluating the performance of charitable care in hospitals. Many states also refer hospitals to report on charity care policies as they wish. Thus, hospitals face no accountability for lackluster philanthropic care policies, or for investing in neighborhood community projects that add more value to the hospital than to the community.

Small policy changes in the disclosure, transparency and reporting of hospital charitable care programs can make a big difference. Not all hospitals have the same resources; Nor do they serve communities of equal income. Each region has different needs, which means that solutions will look different from country to country. For some states, the answer could be as simple as removal The requirement to disclose an old printed newspaper advertisement and replacing them with intake disclosure forms to inform patients of charitable care options. For others, it can be a statewide minimum income setting for charitable care eligibility. For hospitals that have a history Illegal or dishonest practicesThe solution could be to create a formal sanction process for failure to provide proper charitable care.

In some cases, states have held nonprofit hospitals responsible. Some courts I decided that underperforming hospitals should start paying state taxes. In addition, a few states, after a procedure Legislative scrutiny which exposed discrepancies in charitable care spending, calls for more transparency. But these cases are rare and do not necessarily increase the amount of charitable care provided to patients in need.

Nonprofit hospitals play a major role in communities and often save lives. But states have given these organizations billions of dollars in tax benefits, and they expect them to invest most of those savings in the communities they serve. With tax breaks comes community responsibility.

The debate over expanding Medicaid will continue. but with One in ten Adults saddled with medical debt, however Medicaid bulge to over 90 million registrantsNow is the time to do more than just hand out the coverage cards that are proven to deliver little value. We need to explore solutions that expand access.

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