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How Hospitals Are Benefiting the Communities They Serve

By Rick Pollack
July 18, 2017

POLITICO’s recent piece on the impact of the Affordable Care Act on non-profit hospitals is an incomplete and inaccurate understanding of the situation hospitals currently face and the benefits they provide.


First and foremost, the piece takes a narrow view of community benefits and fails to account for the full array of programs and services hospitals provide to their communities. Per the June 2016 IRS report to Congress, hospitals’ financial assistance and community benefit activities reached $157 billion—far more than the value of their tax exemption—a comparison the article neglected to include. The billions that hospitals spend on an array of activities, such as wellness programs, transportation and housing assistance among other community-oriented projects, are not accounted for in basic financial reports. The bottom line: Hospitals continue to provide tremendous benefits to the communities they serve.

Hospitals also use their resources to reinvest in new models of care that go well beyond the traditional hospital walls, finding new ways to help improve the health of their communities—from providing access to medical care for patients in rural areas to supporting cutting-edge medical research and innovations. Hospitals are also working tirelessly to address and combat the social determinants of health, such as poverty and violence, that harm individuals’ ability to achieve well-being.

POLITICO’s piece also omits a comprehensive picture of the fragile financial state of many hospitals nationwide. One out of every four hospitals in America operates in the red. Since 2010, hospitals have absorbed numerous payment reductions for services, estimated as high as $148.75 billion. The fact that the CBO estimates that between 40-50 percent of hospitals could have negative overall margins by 2025 underscores our belief that this piece fails to understand the financial pressures affecting hospitals.

Despite these daunting financial challenges that many hospitals face, our commitment to our mission remains unshakable: to provide a wide array of benefits tailored to the particular needs of the communities we proudly serve.

Topic: Community Health
Tag: Community benefit

Richard J. (Rick) Pollack is the President and CEO of the American Hospital Association.



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