AHA Reports on 2020 Exempt Hospital Community Benefit Reports

Here is the Executive Summary from AHA’s review of exempt hospitals’ 2020 Schedules H (Form 990).  Download the full report here:

Executive Summary
Improving the health of their communities is at the heart of every hospital’s mission.

Tax-exempt hospitals annually demonstrate accountability to the communities they serve by reporting to Internal Revenue Service (IRS) on the benefits they provide to their community using the IRS Form 990 Schedule H and making it publicly available. This report summarizes such community benefit information for the tax year 2020.* Tax-exempt hospitals provide benefits to their communities in a multitude of ways, only some of which is captured by the IRS Form 990 Schedule H. They offer programs and activities to:

• Improve community health by addressing pressing health and wellness needs
• Underwrite medical research and health professions education
• Subsidize many high-cost, essential health services

In addition, they provide financial assistance and absorb underpayments from means tested government programs to aid those in need, such as Medicaid, as well as incur losses
due to unreimbursed Medicare expenses and bad debt expenses that are attributable to financial assistance.

Table 1 shows a snapshot of the benefits tax-exempt hospitals provide to their communities. In 2020, these hospitals and health systems reported total community benefits of over $129 billion, or 15.5% percent of total expenses, half of which resulted from expenditures for financial assistance for patients and absorbing losses from Medicaid and other means-tested government program underpayments. It is of particular note that the amount of community benefit increased from that reported the previous year by almost $20 billion, despite hospitals battling an unprecedented national pandemic.

This report presents the financial costs incurred by tax-exempt hospitals and health systems in providing community benefits. IRS requires such hospitals to report community benefit as a percent of hospital expenses. These numbers alone, however, do not measure the value of the overall tangible and intangible benefits hospitals provide by improving their communities’ health and economic well-being. Tax-exempt hospitals also provide the IRS descriptions of their community benefit programs as part of their filing that begin to tell the hospital’s story beyond what can be learned from the financial information alone. They also engage in a regularly scheduled process, in conjunction with their communities, to develop a plan to tackle the greatest health and wellness needs culminating in a formal Community Health Needs Assessment.

darryll k. jones