When States Mandate Hospital Community Benefit Reports, Provision Increases

Area of Science:

• Health Services Research
• Public Health Policy
• Healthcare Management

Background:

• Nonprofit hospitals provide community benefits and charity care as part of their tax-exempt status.
• State-specific reporting standards for these services vary significantly.
• The association between mandated reporting and the actual provision of services is not fully understood.

Purpose of the Study:

• To investigate the relationship between state-mandated reporting standards for community benefit and charity care and the actual provision of these services by nonprofit hospitals.
• To determine if specific reporting requirements are associated with increased spending on community benefits and charity care.

Main Methods:

• Analysis of 2011-2019 IRS Form 990 Schedule H data for 1,423 nonprofit hospitals.
• Utilized random effects regression models to assess the association between state reporting mandates and community benefit expenditures.
• Examined specific reporting requirements to identify links with increased service provision.

Main Results:

• Hospitals in states with reporting requirements spent a higher percentage of total expenditures on community benefits (9.1%) versus those without (7.2%).
• A similar trend was observed for charity care (2.3% vs. 1.5%).
• Increased number of reporting requirements correlated with decreased charity care provision, suggesting resource reallocation to other community benefits.

Conclusions:

• Mandating reporting for specific services can increase their provision, but not universally.
• Overly broad reporting mandates may inadvertently reduce charity care as hospitals prioritize other community benefit categories.
• Policymakers should carefully select which services to mandate reporting for to align with priority goals.