Hospitals spend less in the community than what they save in tax breaks
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Central Ohio's eight hospitals spent millions in our community from 2020-22 — but just one spent more than it received in tax breaks, according to data the nonprofit Lown Institute shared with Axios.
Why it matters: Ohio's nonprofit hospitals receive a collective $2.2 billion in tax breaks each year.
- Hospitals are exempt from paying a variety of taxes due to their nonprofit status and the presumption that they give back, but the institute's latest report contends the two amounts typically aren't comparable.
Zoom in: Two local hospitals — Nationwide Children's and OhioHealth's Riverside Methodist — rank among the worst in Ohio when their spending is compared with tax breaks.
By the numbers: Children's has the second-largest "fair share deficit" statewide at $121 million, with nearly $168.8 million in breaks compared to $47.8 million in investments.
- It's also the largest deficit among all children's hospitals in the 20 states included in the report.
- Meanwhile, Riverside's $57.1 million deficit ranks fourth-largest in Ohio, with $89.7 million in breaks compared to $32.6 million in investments.
Only Doctor's Hospital, also part of OhioHealth, had a surplus locally — spending $862,000 more than its $12.8 million in tax breaks.
Yes, but: Hospitals disagree with the institute's methodology.
How it works: Lown's community investment calculation includes free or discounted care; community health improvement services like free immunizations; subsidized services like free health clinics; and contributions to community groups and activities that drive community health, like affordable housing and environmental initiatives.
The other side: The local hospitals' representatives tell Axios that calculation is flawed, because IRS guidelines also consider other things when calculating community value, like research expenditures, physician training and absorbed Medicaid and Medicare shortfalls.
- The American Hospital Association called the report "arbitrary" and "anything but 'fair.'"
- It commissioned a 2022 study that concluded "every dollar invested in nonprofit hospitals results in $9 in benefits delivered back to the community."
What they're saying: "The report does not capture the entirety of the community benefit provided by Nationwide Children's," the hospital tells Axios in a statement. "Nationwide Children's takes pride in the scope and depth of our community investment and will continue to grow this investment as the Columbus region grows."