Nonprofit Hospitals Offer Less Charity Care Despite Rising Profits

During the time between 2012 to 2019, profits increased from $43.01 million to $58.61 million for nonprofit hospitals, while charity care spending fell from $6.65 million to $6.36 million.

Hospitals use cash reserves to cover capital costs, offset unexpected shortfalls in reimbursement, and earn higher bond ratings. However, allocating more profits to cash reserves than to charity care raises concerns about the mission of nonprofit hospitals.

Unlike nonprofit hospitals, for-profit hospitals’ spending on charity care increased from $2.29 million to $6.30 million during this time. For-profit hospitals had a four-cent increase in charity care spending associated with each one-dollar increase in profit.