For the first time in almost ten years, Oregon hospitals and health systems cut back on funding for community service projects in 2023, including free health screenings, vaccination clinics, and charity care for low-income patients.
According to the Oregon Health Authority, overall community benefit spending decreased by 8.7% to $2 billion in 2023, or around $192 million less than in 2022. Spending on community benefits has increased since 2015.
In order to keep their tax-exempt status, Oregon’s nonprofit hospitals—which include almost all of the state’s health systems—must offer these benefits.
Enhancing public health and well-being is the goal of community services like free or reduced medical treatment, health education, research, and grants to neighborhood organizations.
In 2023, the majority of community benefit spending—80%, or $1.6 billion—went toward unpaid care, such as charity care, Medicaid shortfall waivers, and subsidized medical services.
Despite a state statute that expanded eligibility in 2023, spending on charity care—free or reduced services for low-income patients—declined by 17.3% from its peak in 2020. In 2023, hospitals spent about $231 million on charitable care.
Medicaid temporarily increased payments to larger hospitals in 2023, which decreased the need for charity treatment and subsidies for low-income or unemployed patients, which contributed to the fall. Consequently, the state stated that overall spending on community benefits decreased by $139 million in 2023.
However, other experts contend that because of the way hospitals determine those expenditures, stated charity care figures have historically been inflated.
According to Eli Rushbank, director of policy for Dollar For, a nonprofit organization that advocates for health care consumers in Portland, many hospitals have historically inflated their bad debt and charity care figures by comparing what they collected to their exorbitant chargemaster prices rather than actual costs. According to him, this gave the impression that certain hospitals were taking on a greater amount of bad debt or offering a lot more charity care than others, but in practice, the discrepancies were frequently caused by price markups rather than the quantity of free care that was actually given.
In the five years preceding 2023, hospitals’ expenditures on community benefits rose by 29%, according to the Hospital Association of Oregon. According to the hospital advocacy organization, this increase was made at a time when over half of the state’s hospitals were losing money due to growing expenses and health insurer reimbursements that didn’t increase in line with inflation.
According to a statement from Becky Hultberg, president and CEO of the Hospital Association of Oregon, hospitals in Oregon are still dedicated to their communities, offering assistance and services beyond direct patient care. However, in order to enhance health outcomes and make care more accessible to those who need it most, these investments shouldn’t be used in place of better care payment.
However, according to the state, direct funding for community initiatives including health screenings, vaccination clinics, and research also decreased by roughly $40 million to $400 million in 2023.
In 2023, the majority of nonprofit hospitals in Oregon still spent an average of 40% more than the minimal amount needed by state law for community benefits. However, the state noted that this was a decrease from 58% in 2022.
Compared to most other states, a larger percentage of hospitals in Oregon are nonprofit organizations. In Oregon, there are just two hospitals that are for-profit. Approximately 20% of hospitals in the country are for-profit.
In 2022, Oregon started monitoring hospital expenditure standards and set up customized spending floors according to the demands of the community and the financial stability of each facility. According to the state, 97.4% of tax-exempt hospitals in 2023 fulfilled or surpassed these standards, up from 92% the year before.
According to a statement from Clare Pierce-Wrobel, chief of the Oregon Health Authority’s health policy and analytics division, hospitals are crucial partners in guaranteeing that everyone in Oregon has access to reasonably priced, fair healthcare. The well-being of the community is directly impacted by their investments in initiatives like workforce training, health education, and vaccination clinics.
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