Apr 2, 2024 - News

Cleveland Clinic is still among nation's worst hospitals for community spending

Exterior shot of the curving glass Cleveland Clinic cancer center

Dustin Franz/Bloomberg via Getty Images

Cleveland Clinic is spending more on the community than it has in recent years, but it still ranks among the worst hospital systems in the country when that spending is compared with its tax breaks.

Why it matters: Hospitals are exempt from paying a variety of taxes due to their nonprofit status and the presumption that they give back to the community.

  • But an annual report from the Lown Institute, a Massachusetts-based nonprofit, demonstrates that the vast majority of nonprofit hospitals, including Cleveland Clinic, don't spend as much on the community as they receive in tax breaks.

Zoom in: As of 2018, the Clinic owned about $2.4 billion in property, all of which is tax-exempt and would otherwise generate about $84 million every year in taxes.

The fine print: With a $212 million "fair share deficit," the Clinic ranked fourth-worst overall, with $1.1 billion in income and just 2.6% of its spending going to the community.

  • Only New York Presbyterian, UPMC Presbyterian in Pittsburgh and NYU Langone had higher deficits.
  • The calculation included free or discounted care, community health improvement services like free COVID-19 testing, subsidized services like free health clinics, contributions to community groups and toward activities that drive community health, like affordable housing and environmental initiatives.

The intrigue: The Clinic's 2.6% community spending was actually the highest, as a percentage, among the worst 10 hospitals in the Lown Institute's rankings.

The other side: In a statement provided to Axios, a Clinic spokesperson said the hospital system was committed to the community and that it calculated its community spending according to IRS guidelines, which include things like research expenditures and Medicaid shortfalls.

  • "The methodology used for [the Lown Institute] report does not fully align with how the IRS Form 990 categorizes community benefit."
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