Hospital Community Benefit Reporting: How Group Reporting Practices Limit Accountability

Abstract

Objective: To identify the prevalence of group reporting of hospital community benefit efforts to the Internal Revenue Service (IRS) and understand hospital and community characteristics associated with this practice.

Design: The study was based on data collected from publicly available community benefit reports from 2010 to 2019, as well as secondary data from the 2020 American Hospital Association (AHA) Annual Survey. The sample was drawn from the entire nonprofit US hospital population reporting community benefit activities. The analytic plan employed descriptive statistics and bivariate analysis.

Setting: The United States.

Participants: All data are self-reported by US hospitals, either through the publication of community benefit reports (IRS Form 990 Schedule H) or a response to the AHA Annual Survey.

Main outcome measures: Analyzed variables include whether a hospital reported its community benefit expenditures individually or as a group member; community benefit spending as a percentage of hospital operating expenses; and whether the hospital was part of a multihospital system, with consideration of hospital and community characteristics.

Results: Between 2010 and 2019, more than 40% of hospitals participated in group reporting, with most doing so consistently. System membership and hospital size were significantly and positively tied to group reporting, with state community benefit policy tied to the lower prevalence of group reporting.

Conclusions: The high prevalence of group reporting limits accountability to communities and restricts an accurate assessment of community benefit expenditures, counter to policy intentions. Stakeholders should consider what modifications to reporting rules could be made to promote transparency and to ensure that the effects of community benefit policies align with intentions.