Methodology

While the empirical evidence concerning the impact of not-for-profit ownership on quality and efficiency is ambiguous, there is evidence that not-for-profit hospitals provide more uncompensated care and more unprofitable services than for-profit hospitals. Yet the magnitude of this difference is not large enough to justify the granting of tax-exempt status to not-for-profit hospitals even though the absolute level of uncompensated care in about 80 percent of not-for-profit hospitals exceeds the value of the hospital’s tax exemption

1.

Private tax-exempt hospital

Data sources: Form 990, year 2009

Sample size ~ 1800 hospitals

Community benefit measure

        Charity care

        Unreimbursed costs for means-tested government program

        Subsidized health services (services provided at a financial loss)

        Community health improvement services and community-benefit operations

        Research

        Health-professions education

        Financial and in-kind contributions to community groups

Analytic model = entails combining seven community benefit measure into two distinct community benefit variables:

• added together the reported contributions of a hospital for those measures pertaining to direct patient care - namely, charity care, unreimbursed costs for means-tested programs, and subsidized health services. PATIENT CARE
• added together the reported contributions for the remaining measures pertaining to broader community service. COMMUNITY SERVICE

Statistical analysis: use descriptive statistics for each of the community benefit measure

Mean percentage of operating expenses

Standard deviation

Interquartile range

Analytic model: use two multiple-regression models, one for each type of community benefit measure, using generalized linear model

Regression model:

        Independent variables:

• institutional-level: motivation of the hospital to provide community benefits and its capability to do so
• community-level, market-level characteristics: the need for community benefit, and potential supply of community benefits (of that hospital in county)
• the level of competitive pressures that tax-exempt hospitals face (such pressure may cause them to curtail their provision of community benefits

2.

Nonprofit hospital status as a corporately owned tax-exempt hospital

Hospital’s willingness to supply community benefits

        Teaching status

        Size (beds)

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