A recent Modern Healthcare article misleads by suggesting that hospitals’ charity care as a share of expenses declined between 2020 and 2023. However, the author’s own data tell an entirely different story.
The data show that charity care has increased and only appears lower when compared against the massive growth in expenses for hospitals and health systems. Hospital expenses grew nearly 18% between 2020 and 2022 alone, driven by increases in labor costs and drug, medical supply and equipment expenses. These expenses created historic financial headwinds, with many hospitals having negative operating margins.
Just as important, the article shortsightedly focuses on just one metric of how hospitals support their communities, and that is charity care. This is only one component of the total benefits hospitals and health systems provide to their communities.
Based on Internal Revenue Service filings, the American Hospital Association estimates total hospital community benefits were $130 billion in 2020 alone, the most recent year for which comprehensive data are available. This was a nearly $20 billion increase from 2019.
Community benefits include financial assistance for patients, the many other programs to advance health and wellness, initiatives and services hospitals tailor and provide to their neighbors, and absorbing Medicaid underpayments. And with large numbers of people now falling off Medicaid rolls, uncompensated care is once again rising.
The fact is, while hospitals have been rocked by wave after wave of external financial challenges over the last several years, they have continued to provide essential services and access to care for their patients and communities.
Rick Pollack, president and CEO, American Hospital Association
Sister Mary Haddad, president and CEO, Catholic Health Association of the United States
