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October 15, 2015

Report Proposes Charity-Care Credits for Nonprofit Hospitals

A new study suggests nonprofit hospitals implement a system of credits and trade to correct a geographic mismatch in supply and demand for uncompensated treatment, The Atlantic writes.

The review was conducted by Northwestern University researchers for the Hamilton Project, an effort of think tank the Brookings Institution. It notes that the greatest need for charity care is at medical centers in low-income areas with limited resources, while the equation is reversed at hospitals in more affluent communities.

The report proposes a "floor-and-trade" system, in which hospitals would be required to set a minimum amount of uncompensated care they will provide each year but have the ability to trade credits, so that facilities in poorer areas can access funding allocated for charity care in richer regions with lesser needs. Such a system would "increase the charity care provided to people falling through the cracks of the ACA in the most efficient way possible," said Craig Garthwaite, one of the study's authors.