Nonprofit hospitals in the U.S. are exempt from most taxes. To earn this status, they are supposed to engage in activities that benefit their communities, such as providing free care to uninsured people or programs to improve neighborhood health. For many, though, their real community contributions fall far short of the tax breaks they receive.
A recent report from our organization, the Lown Institute, found that 82% of nonprofit hospital systems spent less on charity care and community investment than the value of their estimated tax exemptions in 2019, adding up to $18.4 billion in forgone community spending. Given the critical public health needs across the country, that failure has serious human consequences. Those $18 billion dollars could be used to provide Supplemental Nutrition Assistance Program benefits to 12 million more people for a year, end homelessness in the San Francisco area, or double the current federal investment in replacing all lead water pipes in the country.