Highest-earning nonprofit hospitals give less charity care than lower-earning ones, study finds

By Alia Paavola, Beckers Hospital Review, Feb. 18, 2020.

Nonprofit hospitals that generated the highest net incomes provided less charity care to patients relative to their income than their lower-earning peers, according to a new study published in JAMA Internal Medicine.

The study, which analyzed data from 2,563 nonprofit short-term general hospitals, found that nonprofit hospitals collectively earned $47.9 billion in net income in 2017, and provided $14.2 billion in charity care in 2017.

The 640 hospitals in the top-earning quartile generated nearly $48 million in net income, or more than the total income generated by the 2,563 facilities. The hospitals in the three lower quartiles posted an aggregate negative net income.

The study found that for every $100 of their net income, the top-earning 25 percent of hospitals provided $11.50 in charity care for uninsured patients and $5.10 in charity care for the insured.

By contrast, the hospitals in the lower third quartile provided $72.3 in charity care for uninsured patients and $40.90 to the insured.

“Nonprofit hospitals with superior financial performance provided disproportionately low levels of charity care,” study authors said. “Nonprofit hospitals with substantial financial strength should consider more generous financial assistance eligibility criteria to reduce the financial risk exposure of disadvantaged uninsured and underinsured patients.”

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