Representatives of the top charity care providers as a percentage of revenue—not-for-profits Adventist Health System and Baylor Scott & White Health—both pointed to the lack of Medicaid expansion in their states as part of the reason their levels are so high.
Altamonte Springs, Fla.-based Adventist, a not-for-profit system with 45 hospital campuses in nine states, is the top nonpublic charity care provider as a percentage of operating revenue. Adventist provided $316 million in charity care in fiscal 2016, 3.3% of its $9.7 billion in operating revenue. That was relatively unchanged from its 2015 charity care spending.
Mike Griffin, Adventist's vice president of advocacy and public policy, attributed the system's standing to the fact that Florida, where 26 of the system's hospitals are located, has one of the country's highest uninsured rates because Medicaid wasn't expanded.
Next is Dallas-based Baylor Scott & White Health, which provided about $242 million in charity care in fiscal 2016, or 3.2% of its $8 billion in revenue. Julie Smith, a spokeswoman for the system, wrote in an email that Texas also did not expand Medicaid and thus has some of the largest uninsured populations in the country. "We remain committed to meeting the needs of the communities we serve including providing access to care for both financially and medically indigent patients," she said.
The top charity care provider, at 6.32% of operating revenue, was New York City Health & Hospitals, whose unique public operational structure naturally triggers higher charity care levels. Unlike most private hospitals, NYC Health & Hospitals receives funding from the city and state to care for low-income patients.
Meanwhile, in California, which embraced Medicaid expansion and promoted coverage through subsidized plans, several not-for-profit systems ranked at the bottom in charity care spending as a percentage of revenue. Sacramento-based Sutter Health provided the second-lowest amount of charity care as a percentage of revenue in Modern Healthcare's analysis of 2016 data: $51 million on $10.7 billion in revenue, or 0.48%. Grace Davis, the system's chief external affairs officer, said in an email that Sutter saw a sharp increase in Medicaid patients following the ACA, resulting in a $400 million Medicaid shortfall in 2016, when California reimbursed 68 cents for every dollar spent providing care.
Just ahead of Sutter is Oakland-based Kaiser Foundation Hospitals, which dedicated $178.4 million, or 0.74% of its 2016 operating revenue, to charity care. Kaiser Foundation Hospitals' $24.3 billion in revenue made it the second-largest system on Modern Healthcare's list.
Dr. Bechara Choucair, Kaiser Permanente's chief community health officer, wrote in a statement that Kaiser is unique in that it's an integrated system with both hospital and health plan segments. Those segments invested a combined 3% of 2016 operating revenue in programs that benefit low-income patients and promote healthier communities.
Ahead of Kaiser was the University of California Health System, which spent 0.75% out of $10.4 billion in operating revenue on charity care in 2016. A UC spokesperson did not return a request for comment.
Providing the least amount of charity care among the 20 largest systems was Franklin, Tenn.-based Community Health Systems. The financially struggling for-profit provided 0.35% of its $18.4 billion in operating revenue as charity care in fiscal 2016. That's about the same level as 2015, when operating revenue was $1 billion higher. In an email, a CHS spokeswoman, emphasized that not-for-profit systems might classify the same bills as charity care that CHS classifies as bad debt.
Modern Healthcare's review included the 20 largest for-profit, not-for-profit and public systems by operating revenue.
Some advocates are encouraging hospitals to redirect the money they're no longer spending on charity care to programming that benefits their communities, such as health education classes and screenings.
As hospitals' financial situations become more tenuous, they'll have more of an incentive to make sure the community from which they derive their patient population is healthy, said Dr. Georges Benjamin, executive director of the American Public Health Association. "The risk of taking care of that person is so much less," Benjamin said. "You put all that together, the concept of reaching out into the community and making fundamental change in that community knowing that is what's going to keep those people healthier makes so much more sense."
The Hilltop Institute is developing a tool on its website that will allow visitors to search for data on hospitals' community benefit programming, such as the number of programs related to obesity and the community initiatives a certain hospital has launched. The organization also hopes to develop dashboards that will offer hospitals data from their respective states on public health issues, uninsured rates and Medicaid coverage.
