Structural Discrimination in Nonprofit Hospital Community Benefit Spending

Nonprofit hospitals receive substantial tax exemptions to provide a community benefit. However, little is known about the distribution of community benefit spending (CBS) across US communities with varying degrees of social vulnerability beyond the hospital's immediate geographic area.

To assess associations of CBS per capita with community-level characteristics and social determinants of health.

This cross-sectional study used Internal Revenue Service Series 990 Tax Forms from 2018 to 2023, to create a dataset of CBS for nonprofit hospitals in the US. Facility-level CBS allocation to counties was based on inpatient utilization to more accurately reflect a hospital's community. Data were analyzed from January to December 2024.

County-level race and ethnicity characteristics and socioeconomic factors, including educational attainment, proportion living below 138% of the federal poverty level (FPL), and the Social Vulnerability Index (SVI) score.

The primary outcome was total CBS per capita. Generalized linear regression models with a γ log-link function were used to assess the association of CBS per capita with community-level social determinants of health characteristics.

A total of 2465 nonprofit hospitals across 3140 US counties were included. Allocation of CBS varied significantly across communities, with the counties in the highest quintile receiving a mean (SD) of $540 ($250) per capita compared with counties in the lowest quintile with $22 ($16) per capita. Communities in the highest quintile of CBS had a higher proportion of White residents, while communities in the lowest quintile had a higher proportion of residents who were non-Hispanic Black or Hispanic, had lower educational attainment, and were living with incomes below 138% of the FPL. For every 1% proportional increase in non-Hispanic Black or Hispanic residents in a community, there was 1.61% (95% CI, 1.38%-1.84%) and 0.88% (95% CI, 0.63%-1.14%) less CBS per capita, respectively. In addition, there was less allocation of CBS per capita among counties with a greater proportion of people with low educational attainment, greater levels of poverty, or higher SVI scores. These results were consistent before and during the COVID-19 pandemic.

This cross-sectional study found that nonprofit hospitals' CBS was regressively allocated across US communities, with more socially vulnerable or racially and ethnically minoritized communities receiving less benefit than more affluent, non-Hispanic White communities, suggesting that the nonprofit tax system may be structurally discriminatory and contributing to health disparities.