Nonprofit hospitals' community benefits vary greatly due to outdated federal rules

Nonprofit hospitals report community benefits to the federal government, but the process has shortfalls that may misdirect organizations' resources, according to a Nonprofit Quarterly report.

Nonprofit hospitals provide community benefits, or community-based activities, in exchange for tax-exempt status. The hospitals report community benefits to the Internal Revenue Service via Schedule H on their Form 990 filings. Community benefits include free or discounted care for eligible low-income patients, health professions education costs and health services research. The IRS also allows hospitals to report community building activities, such as investments in environmental improvements, housing, coalition building, workforce development and economic development.

However, wide variation often exists among hospitals' community benefit programs and their spending due to vague, outdated federal rules, according to Crain's Chicago Business.

The Crain's article notes that "community building activities are not counted in a hospital's total community benefit spending, which could deter investment in those areas."

Research has shown the influence social determinants of health, such as socioeconomic status and transportation access, have on patients. The Crain's article states, "With the increasing focus on social determinants of health, hospitals and systems are realizing that public health issues need to be tackled together."

The Crain's article concludes variation in community benefit programs will continue to exist unless "explicit rules guiding hospitals' interventions or setting a baseline level of funding" are enacted.

Access Nonprofit Quarterly's full report here. Access the Crain's article here


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