New Analysis: Nonprofit Hospitals’ Value to Communities 11 Times Their Federal Tax Exemption

WASHINGTON (November 17, 2025) – A new analysis by the accounting firm EY (also known as Ernst and Young) for the AHA shows that tax-exempt hospitals and health systems delivered more than $11 in benefits to their communities for every dollar’s worth of federal tax exemption in 2022, the most recent year for which comprehensive data were available.

The report shows that the estimated federal tax revenue forgone by nonprofit hospitals was $13.2 billion, while at the same time they provided $149 billion in benefits to their communities (as reported on the Form 990 Schedule H). This is an increase from prior year analyses that estimated that benefits were 10 times greater than federal tax revenue forgone.

While the report primarily focuses on the value of community benefits relative to forgone federal tax revenue, this year’s analysis also includes, for the first time, an examination of state and local tax exemptions. The analysis found that even when including forgone state and local tax revenues, the benefits far exceeded the combined value of the total tax exemptions.

“Hospitals are the heartbeat of healthier communities,” said AHA President and CEO Rick Pollack. “This EY report shows they’re not only saving lives 24/7 — they’re also pioneering programs that inspire hope and create a stronger, healthier future for all.”

Hospitals are committed to serving their communities in a variety of important ways and report a wide range of community benefit activities, including financial assistance for those in need. In addition, hospitals and health systems benefit communities by:

• Underwriting education, research and training for the next generation of caregivers.
• Subsidizing many high-cost essential services such as trauma care and behavioral health.
• Operating clinics for underserved communities and delivering a wide range of programs and services designed to meet the current and future health needs of the communities they serve.
• Absorbing bad debt expense, which is when hospitals cannot obtain reimbursement from patients for care provided.

Hospitals also strive to ensure that low-income patients have regular access to care through programs like Medicaid and Medicare. This commitment requires hospitals to absorb the financial shortfall when payments from public insurance programs do not fully cover the cost of providing care, which they often do not. In fact, hospitals absorbed $130 billion in underpayments from Medicare and Medicaid in 2023 alone. These shortfalls are worsening — growing on average 14% annually between 2019 and 2023.

For more information on how the entire hospital field is supporting communities and helping patients live healthier lives visit the AHA's Benefits to Communities landing page.