Elsewhere online
August 04, 2015

Study: Nonprofits and For-Profits Spend About the Same for Charity Care

A new study shows that nonprofit hospitals spend about the same as for-profit hospitals for free or subsidized care, The Washington Post reports.

The study, which looked at 264 California hospitals, found that the nonprofits dedicated an average of 1.9 percent of total operating expenses to free care, whereas for-profits dedicated an average 1.4 percent for such care.  About a third of the nonprofits spent less than 0.9 percent on charity care.  

The authors said the results were influenced in part by vague criteria related to tax-exempt status under the Affordable Care Act

The rationale for tax-exempt hospitals is that the tax advantage enables hospitals to provide more free medical care for poor people and public-health outreach. Some people have criticized such tax breaks, arguing that they contribute less to community benefits than to higher executive salaries. About 60 percent of hopitals operate as nonprofits.