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February 11, 2021

Northeast Ohio Hospital Community Benefit Increased 10.6% in 2019

Northeast Ohio hospitals provided nearly $1.8 billion in community benefit in 2019, up 10.6% from the prior year, according to The Center for Health Affairs’ recent analysis of hospital Internal Revenue Service filings. When Medicare shortfall and bad debt are included, hospitals’ collective investment in their communities exceeds $2.4 billion, an increase of more than 12% from 2018.

What is Community Benefit?
Community benefits are programs and activities that provide treatment or promote health and healing as a response to community needs. The objectives of these programs or activities include improving access to healthcare services and enhancing public health.

Included in the IRS’s definition of community benefit are charity care; health professional education; subsidized health services; research; community health improvement activities; cash and in-kind contributions; and Medicaid shortfall, which is the difference between the cost to provide services to patients covered by Medicaid and the reimbursement received.

Uncompensated Care
Uncompensated care, which is the total of charity care and bad debt, reached more than $750 million in 2019, a 17% increase from $642 million in 2018. Charity care represents services provided to patients who do not have the ability to pay for them, while bad debt is the cost of care for which hospitals expected to – but did not – receive payment.

Community-Building Activities
In 2019, Northeast Ohio hospitals also invested $1 million in community-building activities, which are not considered a component of community benefit by the IRS, but represent an investment by hospitals in their communities. Included in this category are activities such as improving housing, economic development, community health improvement advocacy, leadership development for community members, and other types of community support.

Additional Impact
Wages and benefits paid by hospitals to their employees also increased from $8.1 billion in 2018 to nearly $8.7 billion to 2019. These dollars have a ripple effect, igniting further economic activity in the community as employees in turn support local businesses.

About The Center’s Analysis
The Center’s community benefit analysis is based on data reported by its non-governmental, acute-care member hospitals on their IRS Form 990s. Governmental hospitals are not required to file an IRS 990. For this analysis, comparable, independently reported data was used where provided.

For more on hospital community benefit, view The Center’s webinar series. Parts one and two, which are currently available, provide a basic overview and then delve into hospital community health improvement activities. Part 3, scheduled to air in March, will address research and education.