Results from 2016 Tax-Exempt Hospitals’ Schedule H Community Benefit Reports

Download the full report here.

Improving the health of their communities is at the heart of every hospital’s mission. For example, tax-exempt hospitals annually demonstrate accountability to the communities they serve by reporting to IRS on the benefits they provide to their community using the IRS Form 990 Schedule H and making it publicly available. This report presents such community benefit information for the tax year 2016.

Tax-exempt hospitals provide benefits to their communities in a multitude of ways, only some of which is captured by the IRS Form 990 Schedule H. They not only provide financial assistance and absorb underpayments from means-tested government programs, such as Medicaid, but also incur losses due to unreimbursed Medicare expenses and bad debt expenses that are attributable to financial assistance.

In addition, they offer programs and activities to:

  • Improve community and population health
  • Underwrite medical research and health professions education
  • Subsidize high-cost essential health services

In 2016, these hospitals and health systems reported total community benefits of 13.7% of their total hospital expenses, half of which resulted from expenditures for financial assistance for patients and absorbing losses from Medicaid and other means-tested government program underpayments.

This report presents the financial costs incurred by tax-exempt hospitals and health systems in providing community benefits. IRS requires such hospitals to report community benefit as a percent of hospital expenses. These numbers alone, however, do not measure the value of the overall tangible and intangible benefits hospitals provide by improving their communities’ health and economic wellbeing. Tax-exempt hospitals also provide the IRS descriptions of their community benefit programs as part of their filing that begin to tell the hospital’s story beyond what can be found from the financial information.

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