AHA disputes POLITICO story on hospitals decreasing community spending post-ACA

A POLITICO analysis said while the nation’s top hospitals saw a big jump in revenue after the Affordable Care Act took effect, they spent less on the charity care and community benefit spending often used to justify their tax-exempt status.

In one example, POLITICO said Massachusetts General Hospital—ranked best hospital by U.S. News and World Report in 2015—reported a $200 million increase in annual revenue between 2013 and 2015. Its community benefit spending, however, dropped from $62.1 million to $53.8 million over the same time frame.

“A lot of the communities where these hospitals are located are having financial difficulties,” said John Hopkins University health economist Gerard Anderson “The hospitals, which are making money, aren’t contributing to the financial reserves of that community. They are obviously employing people, but they are earning substantial profits and not paying any of those profits to the communities.”

American Hospital Association (AHA) President and CEO Rick Pollack called the story “inaccurate and incomplete,” claiming it doesn’t account for all the programs and services hospitals provide to communities, which he said goes above the value of the tax exemption.

“One out of every four hospitals in America operates in the red,” Pollack wrote on the AHA Stat blog. “Since 2010, hospitals have absorbed numerous payment reductions for services, estimated as high as $148.75 billion. The fact that the (Congressional Budget Office) estimates that between 40-50 percent of hospitals could have negative overall margins by 2025 underscores our belief that this piece fails to understand the financial pressures affecting hospital.”

Read the full POLITICO investigation at the link below: