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Northeast Ohio Hospitals Provided $1.97 Billion in Community Benefit in 2021

Northeast Ohio hospital community benefit grew to $1.97 billion in 2021 according to the latest analysis by The Center for Health Affairs. This is a 5.2% increase from 2020, when $1.87 billion in community benefit was delivered.

Medicaid continuous enrollment under the COVID-19 public health emergency (PHE) was one of the most influential factors in the allocation of community benefit in 2021. During the PHE, the federal government covered more of the states’ Medicaid expenses under the condition that states suspended redeterminations of Medicaid eligibility. This resulted in a large number of people maintaining Medicaid coverage throughout the PHE. Hospitals typically receive roughly 88 cents in reimbursement for every dollar of care delivered to patients covered by Medicaid. As a result, Medicaid shortfall increased 9% from 2020 to 2021.

At the same time, both charity care and bad debt decreased, by 3% and 2.6% respectively. The decrease is likely to be related to Medicaid continuous enrollment because people were not losing their Medicaid coverage during this time. Often, care provided to people who are found to be no longer eligible for Medicaid becomes charity care or bed debt.

Included in the federal government’s definition of community benefit are charity care, Medicaid shortfall, research, health professionals education, subsidized health services, and community health improvement activities.

When Medicare shortfall and bad debt are considered along with community benefit, hospitals’ collective investment in their communities totaled $2.6 billion, up 1.7% from the prior year. This includes $760 million in charity care and bad debt.

Wages & Benefits

Hospitals also collectively paid $9.72 billion in wages and benefits in 2021. This is a $1 billion – or 12.3% – increase over the previous year. Hospitals have been spending considerably more on workforce-related costs in the last couple of years due to shortages, the rise in contract labor costs, and the increase in the proportion of their workforce comprised of contracted workers. Paid wages have a ripple effect in communities as employees spend their earnings on goods and services, supporting 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.