The Lown Institute issued a report April 16 analyzing federal, state and local tax benefits received by more than 1,800 hospitals across 20 states by comparing them to the hospitals’ spending on meaningful community investment.
The nonpartisan healthcare think tank’s report is based on 2020-2022 data from IRS tax returns, CMS hospital cost reports and local property assessment portals.
For the analysis, Lown removed hospitals that closed, converted to for-profit, or were removed from Care Compare as of September 2024. However, the think tank noted that it may not have accounted for all updates since then.
Lown also excluded certain publicly owned hospitals that are not tax-exempt, as well as some children’s and cancer hospitals without cost report data. The think tank said these exclusions may underestimate a hospital’s “fair-share deficit” — the amount by which its tax breaks exceed spending on community benefits.
The IRS categories of community benefit that Lown considered meaningful community investment included financial assistance, subsidized health services, community health improvement services, cash and in-kind contributions, and community-building activities.
Here are nine things to know:
1. Fifty-four percent of hospitals in the analysis had a fair-share deficit.
2. Hospitals with large fair-share deficits and those with large surpluses are sometimes in the same metropolitan area.
3. The total fair-share deficit in 20 states totaled $11.5 billion annually.
4. Twelve hospitals in the analysis had fair-share deficits above $100 million.
5. Forty-six percent of hospitals had a fair-share surplus, meaning their tax breaks lagged spending on community benefits.
6. Overall, hospitals in the analysis provided $22.4 million annually in community investment, while collectively receiving $26 billion in tax breaks.
7. The 20 hospitals with the highest fair-share surpluses:
- North Shore University Hospital (Manhasset, N.Y.) — $217 million
- Long Island Jewish Medical Center (New Hyde Park, N.Y.) — $152 million
- Grady Memorial Hospital (Atlanta) — $135 million
- Mount Sinai Hospital (Chicago) — $78 million
- Lakeland Regional Health Medical Center (Lakeland, Fla.) — $78 million
- Baptist Memorial Hospital (Memphis, Tenn.) — $74 million
- One Brooklyn Health (New York City) — $74 million
- Christus Spohn Hospital (Corpus Christi, Texas) — $73 million
- UPMC Presbyterian (Pittsburgh) — $70 million
- Lenox Hill Hospital (New York City) — $67 million
- Rochester (N.Y.) General Hospital — $65 million
- WakeMed Raleigh Campus (Raleigh, N.C.) — $64 million
- Mount Sinai Medical Center of Florida (Miami Beach, Fla.) — $64 million
- Methodist University Hospital (Memphis, Tenn.) — $63 million
- Memorial Hermann—Texas Medical Center (Houston) — $57 million
- Novant Health New Hanover Regional Medical Center (Wilmington, N.C.) — $56 million
- Houston Methodist (Baytown, Texas) — $55 million
- Mount Sinai Beth Israel (New York City) — $54 million
- UPMC Western Maryland (Cumberland, Md.) — $53 million
- NewYork-Presbyterian Queens (Flushing, N.Y.) — $53 million
8. The 20 hospitals with the highest fair-share deficits:
- Massachusetts General Hospital (Boston) — $325 million
- Mayo Clinic Hospital, St. Marys Campus (Rochester, Minn.) — $260 million
- Hospital of the University of Pennsylvania (Philadelphia) — $247 million
- Brigham and Women’s Hospital (Boston) — $226 million
- Cleveland Clinic Main Campus (Cleveland) — $207 million
- Evanston (Ill.) Hospital — $152 million
- IU Health Methodist Hospital (Indianapolis) — $129 million
- Carle Health Methodist Hospital (Peoria, Ill.) — $120 million
- Nationwide Children’s Hospital (Columbus, Ohio) — $121 million
- Cedars-Sinai Medical Center (Los Angeles) — $104 million
- Orlando (Fla.) Health Orlando Regional Medical Center — $101 million
- Boston Children’s Hospital — $100 million
- Tisch Hospital (New York City) — $93 million
- Cook Children’s Health Care System (Fort Worth, Texas) — $91 million
- Salem (Mass.) Hospital — $91 million
- Milton S. Hershey Medical Center (Hershey, Pa.) — $84 million
- Cincinnati Children’s Hospital — $81 million
- University of Michigan Health—West (Wyoming, Mich.) — $76 million
- Froedtert Community Hospital—New Berlin (Wis.) — $75 million
- WellSpan York (Pa.) Hospital — $74 million
9. Prior to the Lown report, the American Hospital Association and Catholic Health Association of the United States released a report April 9 highlighting the value of benefits that nonprofit hospitals and health systems provide to communities.
Additionally, in a statement shared with media April 16, AHA President and CEO Rick Pollack said, “Every day, all of America’s hospitals and health systems demonstrate their commitment to patients and the pursuit of advancing health. Consistent with this mission, nonprofit hospitals take their accountability for the federal tax exemption they receive very seriously. The benefits these hospitals provide include a broad range of activities chosen based on community input about community need. And these activities are publicly reported every year. Yet some organizations continue to distort and diminish the value of these activities.
“The truth is reports like today’s from Lown that focus on nonprofit hospitals serve as distractions. These reports often rely on methodology that directly omits essential information, data and other factors that can seriously skew results, allowing them to apply an arbitrary ‘fair share’ threshold that is anything but ‘fair.’ This undermines genuine efforts to improve health care access for millions of patients. What is clear and consistent is this: Nonprofit hospitals deliver significant community benefits, far exceeding their tax exemptions.”
The full Lown analysis is available here.
