CLEVELAND, Ohio — Two of Cleveland’s major hospitals will collectively spend nearly $1 billion to address health disparities in Northeast Ohio in 2023, according to newly released reports from health systems health.
And a third, the Cleveland Clinic, reported another $1.46 billion in community impact spending, although that figure includes benefits related to its operations in Ohio, Florida and Nevada.
University hospitals says it invested $707 million in community benefits last year, while MetroHealth System says it spent $243 million. Between 2022 and 2023, all three health systems say they have increased spending on charity care for patients unable to pay, community health programs, medical research, training of doctors and nurses, and other forms of benefits community.
However, the Clinic was ranked among the best among U.S. nonprofit hospitals that don’t do enough to directly benefit their communities, and UH ranks second in Ohio behind the clinic, according to the Lown Hospitals Index 2024 Community Benefits Ranking.
The clinic’s main campus ranked fourth on the Lown Institute’s list of the 10 U.S. hospitals with the worst community spending. These hospitals receive more in tax breaks than they give back to the community — what’s called a fair share deficit — according to the report from the independent Boston-based health care think tank. The clinic disputed the findings and UH said it was working to do more for the community.
In addition to community benefits, UH and the Clinic say they contributed more than $51 billion to the region’s economy in 2023, according to the health systems.
“We are proud to care for our patients, caregivers and their families who live and work in the communities we call home,” clinic CEO Dr. Tom Mihaljevic said in a statement regarding the clinic contributions to community benefits. “We regularly engage with community members and leaders, asking how we can help, and then take action. Our influence on economic conditions helps uplift communities and bring about meaningful change.
UH’s community benefits included investments in maternal and child health, programs to address food insecurity, job creation for the disadvantaged, and charitable care for the uninsured.
“Addressing the root causes of inequality can significantly improve a community’s quality of life,” UH CEO Dr. Cliff A. Megerian said in a statement. “We are committed to educating future caregivers, funding medical research that offers hope to those with limited options, and launching studies and research programs to alleviate health care disparities. »
In order to maintain their tax-exempt status, the Internal Revenue Service requires all nonprofit hospitals to provide benefits to their communities, such as free or discounted care for low-income patients. But the tax authorities give a broad definition of what constitutes a community benefit, according to the information.
On average, nonprofit hospitals nationwide reported that 15.5% of their total annual expenses were intended for community benefits in 2020, the latest figure available from the American Hospital Association.
The tax-exempt status of nonprofit hospitals has come under scrutiny from lawmakers because studies And analyzes suggest that some nonprofit hospitals do not provide enough community benefits to justify their tax-exempt status, according to the information.
Nonprofit hospitals in the United States received $37.4 billion in tax benefits in 2021, more than half of which came from state and local tax exemptions, according to a study. recent study published in JAMA. These tax benefits were concentrated in a small number of hospitals: 7 percent of the nearly 3,000 nonprofit hospitals included in the study accounted for half of the tax benefits, the report said.
But another analysis showed that hospitals brought in more benefits than their tax exemptions were worth, according to media reports.
Tax-exempt hospitals and health systems brought $10 in benefits to their communities for every dollar of federal tax exemption in 2020, the most recent year for which complete data is available, according to an analysis done in 2024 by the accounting firm Ernst and Young for the American Hospital Association.
In 2020, federal tax revenue lost due to the tax-exempt status of nonprofit hospitals was estimated at $13.2 billion. In comparison, the benefits that tax-exempt hospitals have brought to their communities, as reported by the Internal Revenue Service, have been estimated at $129 billion, nearly 10 times higher than the value of federal taxes lost. » said the American Hospital Association.
Education and Financial Aid Are Northeast Ohio Community Benefits
Here are highlights from the 2023 Community Benefits Reports from the Clinic, MetroHealth and UH. Summa Health, based in Akron, did not make its report available.
Cleveland Clinic
Total community benefit in 2023: $1.46 billion, up from $1.42 billion in 2022. Includes community benefits related to operations in Ohio and elsewhere.
Three main areas of spending:
- Medicaid shortfall: $648.1 million
- Education: $350.9 million
- Financial assistance: $261.3 million
MetroSanté
Total benefit to the community in 2023: $243 million, compared to $199.4 million in 2022.
Three main areas of spending:
- Unpaid care: $107.8 million
- Medicaid shortfall: $71.7 million
- Medical education: $50.8 million
UH
Total benefit to the community in 2023: $707 million, compared to $531 million in 2022.
Main spending areas:
- Care provided to Medicaid patients: $268 million
- Education: $100 million
- Medical research: $58 million
- Charitable care for patients unable to pay: $58 million
UH, clinics are major economic drivers in Ohio and elsewhere
UH and Clinic jobs, construction projects and purchases have injected billions into the regional economy, the hospital systems said.
UH contributed $14.3 billion to the regional economy in 2023, » said the health system.
As one of the state’s largest health care employers, UH generated more than $6 billion in labor income in Ohio in 2023 and supported more than 37,000 direct jobs, UH said.
Last year, UH construction activity directly and indirectly supported $280.5 million in economic activity in the state. The most notable construction capital project was the expansion of the UH Ahuja Medical Center campus, which was completed in June 2023 and nearly doubled the size of Ahuja.
The clinic generated $37.6 billion in economic activity for its locations in Ohio, Florida and Nevada in 2023, the hospital said.
This includes more than 74,298 jobs in these states and the purchase of more than $6.6 billion in goods and services from U.S. companies, the Clinic said.
Additionally, patients and others visiting the Cleveland Clinic spent approximately $267.2 million in Ohio, Florida and Nevada.
Information on economic impact was not available from Summa or MetroHealth.
Julie Washington covers health care for cleveland.com. Read previous stories at this link.