Northeast Ohio nonprofit health systems aren't giving back nearly enough to the community, in proportion to how much they save in tax breaks, according to a newly released analysis from a nonpartisan institute.
Some hospital officials, however, dispute the claims in the new report.
Across the country, the Massachusetts-based Lown Institute's fair share report found large academic centers and Catholic health systems are the worst offenders. Among local hospital systems, the Cleveland Clinic main campus once again landed in the top ten for the largest deficit in matching their tax breaks to the tune of $212 million.
The Lown Institute has been publishing this report for several years and this is not the first year that the Clinic has landed in the top ten among major hospital systems.
Other local hospitals mentioned in the report included University Hospitals' Cleveland Medical Center with a $61 million fair share spending deficit, Akron General with a reported $29 million deficit and Summa Health with a $3.5 million deficit.
Lown Insitute CEO and President Dr. Vikas Saini said, by and large, they found nonprofit hospitals don’t pour nearly enough money back into their communities.
“When tax-exempt hospitals started they were small, clearly charitable, faith-based or community organization-based and clearly charitable," he said. "Health care has become a massive, massive, big business and the business imperatives are really driving a lot of it.”
Lown's analysis found 80% of nonprofit hospitals, nationally, give back too little. The group looked at federal records to estimate tax breaks given to nonprofit hospitals, then compared that to what those hospitals gave back to their communities in financial assistance and community health programs.
The analysis did not consider what a hospital spent on research, training physicians and reimbursement for expenses not covered by Medicaid, as the institute deemed those contributions were not "meaningful" community benefit.
Some hospital officials, however, disagree with this methodology. The Clinic disputed the report, in a written statement from representative Angie Smith.
"Cleveland Clinic remains committed to the communities we serve," the statement read. "The methodology used for this report does not fully align with how the IRS Form 990 categorizes community benefit. The excluded categories of research, education, and Medicaid shortfall all have a direct impact on the health of the community. "
University Hospital officials did not respond to Ideastream's request for comment on the report.
Saini said federal regulators have operated on an honor system and given hospitals the benefit of the doubt without really looking at what hospitals are counting for community benefits. He said that doesn't work anymore.
"Unfortunately, the system as it's evolved, especially in the last 20, 30 years, is increasingly incented to do things that are higher volume and higher margin and more profitable, or go after the quote unquote customer, which is a silly way of thinking about health care," he said. "I think what we're seeing and what our numbers suggest is it's really time for a reset."
The perceived lack of transparency and accountability for hospital systems and community benefit dollars has attracted the attention of some congressional leaders recently.
Four U.S. senators sent a letter to the Internal Revenue Service last August requesting increased oversight of compliance with the community benefit standard. Sens. Bill Cassidy, MD (R-La.), Charles Grassley (R-Iowa), Raphael Warnock (D-Ga.) and Elizabeth Warren (D-Mass.) signed the letter asking for greater transparency and oversight over nonprofit hospitals.
