Value-based care putting pressure on nonprofit hospital finances, survey finds

Half of healthcare nonprofit funding comes from fee-for-service revenue, according to a survey of nonprofit organizations from BDO. This is significantly more than nonprofits from all sectors, which bring in 29 percent of revenue from fee-for-service.

The BDO "Nonprofit Standards" survey polled 105 nonprofit organizations across sectors with revenue over $10 million. These included health and human services providers, public charities, international NGOs, universities, trade associations and private foundations.

The survey findings indicate healthcare nonprofits are facing greater financial difficulty, which BDO credits to the transition to value-based payment. One-third of health and human service organizations recorded a net loss on operations last year, compared to 22 percent of nonprofits in all sectors, according to the report.

With these results, healthcare nonprofit funders want more information on how their dollars are being spent, the survey shows. Three-quarters of respondents said their funders want more information about outcomes and impact.

"Ultimately, for healthcare institutions to survive and thrive through the transition toward value-based care and payment models, they will need to understand the evolution of their revenue streams, funder expectations, and the nature of emerging and existing competition," a BDO blog concludes.


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