Not-for-profit hospitals in Minnesota said they devoted nearly 12% of all the money they spent in 2010 on community benefits, including free and discounted healthcare for the poor, unreimbursed care for Medicaid patients, the training of future clinicians and medical research, a new report from the Minnesota Hospital Association says.

A Modern Healthcare analysis of about 1,800 not-for-profit healthcare providers' tax returns last month found that the national median was about 5.9% of all expenses per hospital or system in 2009, the most recent year available.

The Minnesota Hospital Association survey report is one of many published annually in various formats by state hospital associations. For example, other reports are available online from the associations in Ohio (PDF), Illinois (PDF), and Maryland (PDF), among others.

In Minnesota, 147 nonfederal community hospitals responded to the association's survey and said they dedicated a total of $2.3 billion in expenses to community benefits in categories officially recognized by the Internal Revenue Service. That was 11.6% of all hospital operating expenses in the state.

The figures are listed as the cost to hospitals to provide the care, not the marked-up price consumers would see on a hospital bill.

Not-for-profit hospitals are required by federal law to provide such community benefits in exchange for exemption from federal taxes, although Congress has resisted setting defined quotas on how much hospitals must spend.

The IRS has ruled that some forms of financial losses by hospitals do not count as community benefit, chiefly unreimbursed Medicare expenses and care provided to patients that was supposed to be paid for but never was, which is referred to as bad debt. The Minnesota Hospital Association report said hospitals' community contributions in 2010 would increase to $3.4 billion if those categories of spending were counted as community benefits.