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March 27, 2024 (Cleveland, OH)

Northeast Ohio Hospitals Provided $2.05 billion in Community Benefit in 2022

Northeast Ohio hospital community benefit rose to $2.05 billion in 2022 according to the latest analysis by The Center for Health Affairs. This is a 4.3% increase from the $1.97 billion in community benefit delivered by hospitals in 2021.

The largest share – the amount of financial assistance provided to the uninsured and the Medicaid population – rose to $1.252 billion, up 4.75% from $1.195 billion in 2021. Hospitals also increased the provision of subsidized services by 69% from about $47 million to $80 million. Spending on medical research to develop new and more effective ways to treat diseases and injuries increased 11.2% to $179 million.

Overall, community building activities grew from $821,000 to $976,000 in 2022. According to the Internal Revenue Service (IRS), which defines hospital community benefit reporting, the following activities qualify as community building:

  • Physical improvements and housing.
  • Economic development.
  • Community support.
  • Leadership development and training for community members.
  • Coalition building.
  • Community health improvement advocacy.
  • Workforce development.

Within community building activities, two areas that did see a decrease in spending are workforce development and community health advocacy.

As hospitals were grappling with substantial increases in labor-related expenses, spending on workforce development dropped from $196,912 in 2021 to $44,051 in 2022. However, at the same time, spending on the training of interns and residents, nurses, clinicians and other healthcare specialists rose $19 million, an increase of 4%.

Spending on community health improvement advocacy decreased, from $150,033 in 2021 to $45,494 in 2022, although actual cash-in-kind contributions for community benefit grew from $17 million to $21 million.

Bad Debt & Medicare Shortfall

Medicare shortfall and bad debt also saw increases in 2022. While not included by the IRS in its definition of community benefit, these are costs to hospitals associated with providing care to patients for which they are not reimbursed.

Medicare shortfall is the difference between the cost of providing services to Medicare beneficiaries and actual Medicare payment for those services. Medicare shortfall increased significantly to $257 million. This was a 70% increase over 2021’s $150 million.

Bad debt — which is nonpayment by individuals for services for which hospitals expected to be reimbursed — increased nearly $28 million to more than $511 million in 2022.

Salaries & Benefits

Among the largest employers in the region, Northeast Ohio hospitals also provide economic value in the form of salary, wages and benefits paid to hospital employees. In 2022, this increased $1 billion, or 10.5%, to $10.7 billion from $9.7 billion in 2021. The cities where the hospitals are located, as well as the cities in which these wage earners reside, tax individuals on their earnings and bring valuable revenue to local communities.

It is also important to note that hospitals have spent considerably more on workforce-related costs since the beginning of the pandemic due to shortages, the rise in contract labor costs, and the increase in the proportion of their workforce comprised of contract workers.

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. Government hospitals are not required to file an IRS 990. For this analysis, comparable independently reported data was used where provided.