BECKER HEALTHCAREAPRIL 13, 2023

The American Hospital Association said a report from the Lown Institute on nonprofit hospitals’ charity care and community benefit spending “is wrong and cannot be taken seriously.”

Nonpartisan healthcare Think Tank Lown Institute released its Fair Share Spending report on April 11. It found that out of 1,773 nonprofit hospitals evaluated, 77 percent spent less on charity care and community investment than the estimated value of their tax breaks, which the institute calls a “fair share” deficit.

AHA General Counsel and Secretary Melinda Hatton defended hospitals’ commitment to their communities and criticized the Lown Institute’s report.

“The Lown Institute’s latest report on hospital community benefits, like the previous one, is wrong and cannot be taken seriously as it once again relies on obvious biases and suffers from serious methodological flaws,” Ms. Hatton wrote. She contends the institute’s report cherry-picks how it measures community investment and ignores challenges hospitals and health systems faced due to the COVID-19 pandemic, among other “blatant issues.”

Ms. Hatton cited a recent analysis from EY in a report commissioned by the AHA, which found that for every dollar in tax exemption, hospitals provided nine dollars of community benefit. “We welcome a discussion about the many benefits hospitals provide to their communities, but relying on the obvious bias, fuzzy math, and dubious conjecture undermines efforts to improve access to high-quality care for all Americans,” she wrote.

This isn’t the first time the AHA has taken issue with analyses out of the Lown Institute. The association slammed the 2022 edition of the Fair Share Spending report, too, with AHA CEO Rick Pollack calling it “an obvious example of relying on preconceived notions and faulty methodology to draw inaccurate conclusions.”

A recent but separate analysis from the Kaiser Family Foundation found tax exemptions for nonprofit hospitals amounted to $27.6 billion in value for 2020, which exceeded nonprofit hospitals’ total estimated charity care costs of $16 billion.

The AHA pushed back on that finding too, pointing to the EY analysis and challenging what it deemed “a narrow reading of community benefit limited to financial assistance.”