American Hospital Association: Tax Exempt Hospitals Provide 1000% ROI
No kidding, the American Hospital Association commissioned a study that concludes the public earns $10 for every $1 in tax breaks granted to nonprofit hospitals. That’s a 1000% return on investment. I don’t understand how anybody could possibly question tax exemption for nonprofit hospitals with those kinds of results. Here is the press release:
WASHINGTON (September 24, 2024) – A new analysis by the international accounting firm EY (also known as Ernst and Young) for the AHA shows that tax-exempt hospitals and health systems delivered $10 in benefits to their communities for every dollar’s worth of federal tax exemption in 2020, the most recent year for which comprehensive data is available. This represents an increase from $9 in benefits the prior year despite serving on the front lines of a once-in-a-century pandemic. The full analysis can be found HERE.
In 2020, the estimated federal tax revenue forgone due to the tax-exempt status of nonprofit hospitals was $13.2 billion. In comparison, the benefit tax-exempt hospitals provided to their communities, as reported on the Form 990 Schedule H, was estimated to be $129 billion, almost 10 times greater than the value of tax revenue forgone.
I try to be fair and balanced when it comes to tax exemption for nonprofit hospitals. I swear I try. I am in favor of tax exemption for hospitals, believe it or not. I appreciate the concept of an emergency room, at least, open to all comers. And I think health care is a human right that should not be allocated by the market. That’s right. I am a socialist with regard to health care. I don’t mind admitting it, I ain’t running for office.
Tax exemption for nonprofit hospitals is not a perfect system by any means. But these kinds of lies, damn lies, and statistics make it really hard to defend the concept. AHA is protesting way too much, and unnecessarily so. One thousand percent? C’mon! Those results, by the way, are from a report bought and paid for by the industry participant with the most skin in the game. It’s a stain on AHA’s individual nonprofit hospital members that their organizational representative insists on immediately attacking contrary academic reports and studies, while peddling over-the-top statistics that don’t even bother to sound credible. Independent reports, such as those prepared by the Kaiser Family Foundation and the Lown Institute don’t jive with AHA’s commissioned report. AHA should tell us why academic reports are wrong. I have said before that AHA’s knee-jerk PR machine is not helping its own cause, for Christ’s sake. If the defenders of tax exemption want to be taken seriously, they need to be serious in their defense of the concept.
Why tell big whoppers in defense of what might actually be defensible on its own merits?
darryll k. jones