Health policy experts have long criticized the city’s nonprofit hospitals for failing to offer enough free or discounted care to patients in need, despite getting hefty tax breaks. Now, the influential Greater New York Hospital Association has devised its own study measuring its members’ impact on their communities.
Hospitals in the city spent $9 billion on community benefits in 2022, which include charity care, financial assistance, community construction projects and physician education, according to a new report released by GNYHA. Community benefit spending, a requirement for nonprofit hospitals that measures how much they invest in their communities, equated to 17.9% of hospitals’ average operating expenses – higher than the national average of 10.1%, according to the analysis.
GNYHA, which lobbies on behalf of 280 hospitals in New York and surrounding states, says that its report offers a more accurate depiction of how much city hospitals spend on free or discounted care to patients than analyses that have singled out wealthy institutions for offering low levels of charity care.
Elisabeth Wynn, executive vice president of finance at GNYHA, said critics of hospitals’ community benefit spending “cherry-pick” the activities included in their definition, offering a misleading picture of how hospitals give back. The association’s report uses the definition of community benefit spending devised by the Internal Revenue Service, she said.
Some experts, however, say that many of the “community benefits” hospitals provide are not all that charitable. For example, the largest community benefit spending category reported by city hospitals was treating Medicaid patients; while the public insurance reimburses hospitals at a lower rate, accepting it isn’t a choice, said Dr. Ge Bai, a professor of accounting and health policy at Johns Hopkins School of Medicine in Baltimore.
Charity care, which provides free or discounted services to patients, is a more accurate measure of community benefit spending because hospitals voluntarily do it, Bai said. In 2022, hospitals across the country spent an average of 1.9% on charity care, according to federal cost report data – more than the citywide average of 1.06%.
Wynn said that city hospitals provide a lower level of charity care because more patients in New York have insurance coverage, although hospitals can offer free or discounted care to both insured and uninsured patients.
Health policy analysts have called out some of the city’s wealthiest hospitals for dismal community benefit offerings. New York-Presbyterian’s Weill Cornell Medical Center, for example, spent $142 million on such benefits in 2021 – a small fraction of the $415 million it received in tax breaks, according to the Lown Institute, a Needham, Massachusetts-based think tank that analyzes hospital financial practices.
GNYHA commissioned its community benefit report to counter the narrative that hospitals underspend on community benefits, said spokesman Brian Conway. The association, the state’s third-largest lobbying spender, has long been a formidable presence in Albany, spending $4.7 million on lobbying last year to push state officials to ramp up Medicaid reimbursement rates for hospitals and pour more money into safety-net institutions.
The report comes as city agencies prepare to ramp up oversight of hospital community benefit spending. The Office of Healthcare Accountability, a city agency created to analyze hospital costs, is set to release its first report next month, which is expected to include information about charity care and other community benefits, Wynn said.
